Russian discount retailer Fix Price to list on LSE as poverty bites

Russian discount retailer Fix Price is planning the largest IPO by a Russian company on the LSE since 2017. The company filed the requisite paperwork with the London Stock Exchange today and is aiming for a listing next month. It is aiming to raise at least $1bn, which would value the company at more than $6bn.

Both Goldman Sachs and the Russian Marathon Group investment company hold minority shareholdings in Fix Price which was set up in 2007 by Artem Khachatryan and Sergei Lomakin (who also owns the Latvian football club Riga FC). The company operates over 4,200 stores across Russia and the former USSR that sell a range of about 1,800  household cosmetics, food and sundry other products. All prices are capped at $3.40 and about 80% of them retail at a dollar or less.

Poverty Russia

Even before the arrival of COVID-19, Fix Price had seen like-for-like sales grow at double-digit rates for 16 quarters in a row as a drop in Russian living standards had increased discount retailers market share.In the twelve months to December 31 2020 Fix Price’s revenues increased by 33% to $2.6bn.

“We pioneered variety value retail in Russia when we opened the first Fix Price store in 2007 with a vision to create the dominant retailer in this highly promising segment of the market,” said Fix Price CEO Dmitry Kirsanov. “With a presence in 78 of Russia’s 85 regions, as well as neighbouring countries, and a strong track record of results in our home market, Fix Price is well positioned to pursue expansion both inside and outside of Russia.”

Fix Price has not been alone in spotting the commercial potential in the decline of the average Russian’s purchasing power. Last October, market leader X5 launched its new Chizhik line of discount shops while (also today) its rival Magnit announced that it was reopening seven of its old Magnit Convenience stores under the My Price brand.