Most regional shopping centers will develop foreign brands under a franchise

Most of the regional shopping malls will develop foreign brands on a franchise basis. We are talking about European and American names, as well as Turkish ones. For example, the Mango chain announced its readiness to work in this way: the company indicated that it would discuss this scenario with the owners of shopping centers. This was told to Izvestia by the head of the Union of Shopping Centers Bulat Shakirov.
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If the shopping centers are franchisee partners of retailers, it will turn out that the centers will rent space from themselves, he noted. Larger foreign sellers (for example, Zara), who have stopped working in the Russian Federation, are unlikely to practice this approach: their business is too large to manage a shopping center.

“This is a common practice during crisis situations, and this is not the first time the market has encountered such partnerships. In this case, the shopping center will organize a department that deals with these projects in retail, although it is not yet clear on what terms the franchisee partners will develop the retail business in the Russian Federation. Meanwhile, it is highly likely that many shopping centers will take advantage of this opportunity,” the expert said.

On May 18, the head of the CORE.XP (CBRE) retail department in Russia, Marina Malakhatko, noted in an interview with Izvestia that the best option for foreign retailers wishing to return to Russia under their own brands would be to work through a foreign partner. He, according to her, will be engaged in the development of the brand in the country. At the same time, she noted, the flagship company will be able to solve its reputational problems.

On May 4, Evgenia Khakberdieva, Regional Director of the Retail Real Estate Department at Knight Frank Russia, predicted the return of major international brands to the Russian market by autumn 2022.

At the same time, on April 20, Sergey Nosov, director of the Asia, Africa and Latin America Department of the Ministry of Industry and Trade of the Russian Federation, said that manufacturers from China could take the place of foreign companies that left the Russian Federation. According to him, the Ministry of Industry and Trade has already formed the needs of Russia by sector and transferred them to the Chinese side.

On March 23, the head of the Ministry of Industry and Trade of the Russian Federation, Denis Manturov, reported that there would be no interruptions in the supply of clothing and footwear in Russia, since there are a sufficient number of domestic manufacturers on the market. The same applies to household appliances and furniture.

At the beginning of March, foreign brands began to announce the termination of their activities in Russia. Many Western brands have paused their activities in the Russian Federation. Among them are Nike, Adidas, Zara, IKEA, Lego, Apple, Samsung, etc. After a few months of “pause”, some foreign companies began to sell their business in the territory of the Russian Federation.

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