(This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine)
MOSCOW (Reuters) – Russian consumer electronics retailer M.Video-Eldorado will more than halve its 2022 investment programme in year-on-year terms, Chief Financial Officer Anna Garmanova said on Wednesday, and planned to continue opening stores once the situation stabilises.
M.Video, which used to buy goods from distributors in roubles, has turned its hand to imports since May, Garmanova said, as the company seeks to diversify its supply chains. The company last week announced a partnership with an Uzbek household appliances manufacturer.
M.Video warned of challenges ahead in April, as a tanking rouble contributed to a brief surge in sales soon after Russia sent tens of thousands of troops into Ukraine on Feb. 24.
Russian companies are being forced to adapt to Moscow’s growing isolation due to sanctions over the Ukraine conflict and supply chain disruptions.
“The big brands will either come back or they won’t,” said Garmanova, who took up her role on March 15. “Second-tier brands will take their place.”
Garmanova said one of the main focuses this year was to restart commercial agreements and that a quarter of sales by departing suppliers have already been replaced.
The company’s capex programme totalled 15.1 billion roubles ($258 million) in 2021. It spent 3.9 billion roubles on store openings, she said.
Garmanova noted that none of M.Video’s suppliers had definitively refused supplying to Russia in the future. Many Western companies have suspended operations over Moscow’s actions in Ukraine, but only a handful have announced deals for a permanent exit.
M.Video is looking at expanding its supplier base in China, Turkey and countries of the former Soviet Union, Garmanova said.
($1 = 58.4500 roubles)
(Reporting by Reuters; editing by David Evans and Jonathan Oatis)
