Who owns the tape. Who owns the retail chains in Russia? Lenta is a large trading network

Company creation: The first Lenta store was opened on October 25, 1993. The store-warehouse for wholesale buyers quickly became popular with target audience. After 4 years, 2 more stores are opened in St. Petersburg, much closer to the center and to their customers.

After another 2 years, the shops are closed, and the Lenta shopping center, whose area was 2700 square meters, opens its doors to customers.

Field of activity: retail and small wholesale trade.

Full title: society with limited liability"Ribbon".

Now "Lenta" is a large retail chain, whose supermarkets are in many cities of Russia. 14 out of 39 shopping centers located in the northern capital. The total staff of the company for 2010 is 12,000 people. Trade turnover for 2009 - 1.8 billion dollars. The headquarters is located in St. Petersburg.

41% of the company's shares were acquired by investor August Meyer, 30.8% - owned by VTB Capital, another 11% owned by the European Bank for Reconstruction and Development. The remaining 17% is shared by minority shareholders.

"Tape" in faces

The general director at the beginning of 2011 is Sergey Yushchenko.

Contact Information

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Creation of the company: the world-famous group of companies "Ferrero" opened a representative office in Russia in 1995, establishing a closed joint-stock company with completely foreign capital "Ferrero Russia". In 2004, the company actively develops an extensive commercial structure, which already now covers 93 large cities of the Russian Federation.

“The difference between a pharmaceutical company and a hypermarket is that, having huge operating costs, you often do not produce anything,” jokes Oleg Zherebtsov, who made a fortune on grocery stores. About 20 years ago, he founded the Lenta chain, which is now one of the top 10 retailers in Russia. Zherebtsov invests the money from the sale of his stake in Lenta into the market, which he himself calls "complex" and "small" - pharmaceuticals

Oleg Zherebtsov

“I wanted to jump into a completely different industry”

— Let's talk about how you chose pharmaceuticals. In 2009, having sold your stake in Lenta, in the program Business Secrets with Oleg Tinkov, you said that you see two areas that are growing - the agricultural industry and medicine in the broadest sense. Why did you choose medicine?

— First, I spoke about the sectors that have the potential for growth. They may not grow on their own, but they have the potential to grow. This is an important note. Secondly, medicine is a fairly broad concept, I would like to focus on pharmaceuticals, on the production of drugs. I have always looked at sectors in which an obvious technological breakthrough is possible. It just so happened that in our country, various sectors of the economy grew spasmodically. So, although there was great amount grocery stores[and in the 1990s], the explosive growth of networks occurred in the early 2000s. In my opinion, now it's just the turn of pharmaceuticals. Why pharmaceuticals, I am often asked this question ...

- ... But not the agricultural industry?

— I still believe that in the field of agriculture it is also possible to apply a huge amount of technology and innovation and, as a result, increase labor productivity. Giant mechanization, the replacement of the old by the new, the increasing role of genetic engineering, for example - all this is achievable in the production of products. It’s just that at some stage you need to make a choice, there won’t be enough strength for everything.
Perhaps I wanted something absolutely radical, I wanted to jump into a completely different industry, try my hand at something else. If my universal business principles work in one industry, why shouldn't they work in another?

- Many entrepreneurs who have made fortunes in other businesses at some point began to invest in the development of drugs at the call of the heart, I would say. How important were the social and, perhaps, ethical reasons for you?

— I treated it as a missionary project from the very beginning. I knew in advance that there are chances that it will not take place, there will be no operating profit, or it will have to wait a very long time. I was ready for any scenario development. But it so happened that, having completed the construction of the plant and started selling last year, 2014, and we have only been operating for about 15 months, I discovered a huge demand for our products, for our sterile liquid medicines. And, coupled with the growth of the euro and the increase in the price of imported medicines, we have received demand, which is now loading all our capacities by 100%, and we have orders for many months in advance. So we are in a good position.

After the conflicts in Lenta, Oleg Zherebtsov is in no hurry to attract investors to Grotex: for now he is the sole owner of the company (Photo: Ekaterina Kuzmina / RBC)

“I will become the most unhappy person if we sell Lenta”

Oleg Zherebtsov was born on May 21, 1968 in Bryansk. Grew up in Kabardino-Balkaria, in small town Tyrnyauz. He studied for a year at the Mining Institute in Moscow. After the army, he studied at the Mining Institute in Leningrad, but did not graduate.

"Tape" and "Norma"

In 1993 he founded the Lenta retail chain, the first stores were opened in St. Petersburg. “I think I will be the most miserable person if we ever sell Lenta,” Zherebtsov said in an interview with Sekret Firmy in 2005. Two years later, Zherebtsov launched another retail project - the Norma supermarket chain, also in St. Petersburg.

Sail and conflict

In the mid-2000s, Zherebtsov took up sailing, in 2008-2009 he assembled the Team Russia team with his own money and took part in the Volvo Ocean Race around the world regatta. Participation in the race cost him € 20 million.

In 2008, a conflict broke out between Zherebtsov and the second major shareholder"Tapes" by August Meyer. Among the claims that Meyer's supporters made to Zherebtsov was the parallel development of Norma as a personal project and the departure from managing Lenta in order to participate in sailing competitions.

Deal and new business

In the fall of 2009, Zherebtsov completely left the company, selling his stake for $110 million to TPG Capital and VTB Capital funds - more than half of this amount he had to pay on personal obligations. "Norma" Zherebtsov sold in 2011.

With the money received from the sale of stores, as well as borrowed funds, Zherebtsov created the Grotex pharmaceutical company in 2010. Built in St. Petersburg from scratch, the Solopharm plant began production in the summer of 2014. According to him, Zherebtsov has invested €74 million in the first two stages of the plant, and plans to invest another €32-33 million in the third.

- When you were building Lenta, you yourself went shopping a lot and asked people what they lacked, what they needed. When starting a pharmaceutical project, for example, choosing niches, did you act in the same way?

This project was no exception. Of course, you also read analytics, look at trends, at growth, at dynamics. But, I think, the shortest marketing, the simplest, is to communicate with people, with the owners of pharmacies, with doctors and with consumers, and ask what they lack.

I had to interview a huge number of people. But everyone says the same thing: “Russian medicines are of poor quality, we don’t trust them: import, import and import again.” Go to the pharmacy, look at the shelf, there are solid imported medicines everywhere. We, as a country, import 82% of medicines in monetary terms. This is a gigantic distortion, which was born as a result of the backwardness of our pharmaceutical industry. In my opinion, it is always possible to do what is imported, simply minimizing transport costs.

We produce liquid dosage forms, and 95% of liquid sterile medicines are water. That is, in fact, importers of liquid medicines transport water across the border. We are located in St. Petersburg, 10 km from Lake Ladoga. We purify water here, mix substances, excipients and create added value within these walls, at this plant. We have invested €74 million in this building, and I believe we have touched almost all sectors of liquid sterile forms: hospital solutions, injections, ophthalmic, nasal preparations, ear medicines, sprays.

— Why did you choose the segment of liquid sterile preparations? Commercial Director Mikhail Polozov said to your company that to launch the production of pills, it is enough, roughly speaking, to sell two personal cars, and the production of liquid drugs costs orders of magnitude more.

— I have always seen any business as a kind of challenge, as a challenge. For the construction of this plant, we attracted 31 companies: there were a lot of projects, but they were all interconnected. It was a challenge, several years of work, almost three years without stopping, in order for the plant to start working.

It's clear that I've maximized all my financial resources to do so. The pharmaceutical industry has an entry barrier that is measured in tens of millions of euros. And obviously, the higher the entry barrier, the lower the competition. But, on the other hand, not everything is decided by money. A lot depends on the team, the people you work with, [technological] solutions. And I tried to take the latest Western solutions. If the same plant were being built in Belgium or Spain now, it would look exactly like our GMP plant looks like. And the products we make can be exported to these countries. Our preparations are not worse in quality than European ones. In fact, we have created an enterprise with a 10-15 year perspective not to be infringed by competition in terms of quality and efficiency.

Oleg Zherebtsov says that Solopharm works 12 hours a day, six days a week to develop, there is not enough time even for his favorite sailing (Photo: Ekaterina Kuzmina / RBC)

“In pharmaceuticals, no one responds to the desires of the consumer”

- You said earlier that Lenta is a compilation of 400 stores from all over the world. Can you say the same about the Solopharm plant?

– Probably, I didn’t visit 400 pharmaceutical plants, maybe only 15 or 17. You look at any ideas: how people change clothes, how to reduce the area for unloading products. I brought my logistics experience here. When designing a plant, it is very important to consider internal logistics - this is something I have always loved to do. This is my hobby - to count millimeters, pennies and think about the shortest internal logistics, the shortest chains of movement of raw materials, packaging: how to reduce [the number of employees] to one or two people on the lines, how to create those technological solutions that would be better than competitors in terms of cost. And I like to make things cheap for the masses - I really like it. This is exactly what people in our country do not like to do. They always point their finger at the most expensive items, whether it's drugs or cars, and say, "Well, we'll make a few copies, but the product will be at the very top of the marketing pyramid: it doesn't matter that there are few consumers, but the price is high."

But I liked to do mass things. By creating hypermarkets [Lenta], we have enabled millions of citizens to buy products of guaranteed quality, cheaply, in clean rooms. It can be said that I transferred this plot of cost formation from hypermarkets to this enterprise, where a million ampoules and a huge number of sterile liquid dosage forms are now made daily for the general population. Our strategy is very simple. We want to reduce the cost of drugs by 30-40% using the same molecules, substances [as those of competitors]. In fact, the cost of a substance in wholesale price drugs rarely exceed 10%.

— You used the experience of various foreign pharmaceutical companies. When you plunged into pharmaceuticals, did a company appear for you that you would call the Walmart of pharmaceuticals?

- In Walmart, I first of all liked the character of Sam Walton himself [the founder of the network], his leadership qualities. This is the way of the entrepreneur, the way of mistakes. Still, he took up Walmart at a relatively late age. The period that he went through as a person, the culture that he built, the atmosphere in the company - this is what was closest to me.

In pharmaceuticals, I have not yet encountered such a [company]. Still, I am an early person in this business, I don’t know many people in this business, to be honest. I am often asked the question: "This person is so famous." I say, "I just don't know." Because I dealt with this idea on my own and did not focus on what is happening in our country in terms of experience or practice. In fact, we reproduced the Western experience and built a plant here without regard to anyone else.

— You said that you transferred your logistics experience to Solopharm, in particular, but what else?

- It is clear that the culture of management is also transferred. I discovered in the pharmaceutical industry an archaic form of management, unproductive work, rather slow. I have 22 years of entrepreneurial experience and I can somehow compare with different businesses.

The pharmaceutical industry did not have that dynamic business culture that I used to see in living companies, especially the FMCG market [consumer goods], where there is higher competition, where there is a fight for every ruble, and the dynamics, the speed of reaction to market changes is colossal . In the pharmaceutical industry, no one reacts to market changes, to the desires of the consumer: that a different package is needed, that a design needs to be changed. In this sense, we are probably ready to listen to consumers better, to take their opinions into account better. I'm used to quick decisions, short meetings or no meetings at all, using electronic means of communication, all of which I didn't see in pharmaceuticals, to my surprise. We have a very flat structure: 11 people are subordinate to me. Good team, minimum meetings, many emails hard work 12 hours a day.

I had, in fact, to impose the experience that I had on the pharmaceutical business, and many people twist their fingers at the temple and say: “It’s not accepted, it’s impossible, why are you doing this? It’s not like that in our pharmaceutical market…” and so on. I've heard a lot of this.

“I expected to ensure the supply of drugs to the army”

— You are the sole owner of the main company Grotex. But there are still companies in the group that deal with scientific developments and there you have partners. This, as I understand it, researchers involved in development?

“I give due respect to those people who over the years, perhaps decades, have grown knowledge about certain molecules, about certain drugs that they have not been able to commercialize. Because it is a huge job, not only to create a molecule or a formula, but a lot of work to bring any drug to the market: to produce it correctly, to make it stable, so that the drug has not only an active ingredient, but also excipients that give him a long period of use, create the right packaging. The formula is not yet a cure. It's like the meat running around the field in the Kostroma region is not packaged meat lying on the shelves in a hypermarket, cleaned and tested for quality.
Therefore, I think it is right to create partnerships for original drugs. The partners are technologists from the Soviet era or from the early Russian period, they have this knowledge about molecules. Solopharm will deal mainly with production. Research is a separate matter. Most of the portfolio of Solopharm drugs - 85-90% - are still generics, well-known open formulas, they do not need to create a partnership.

From store to IPO

Lenta began with the first store opened by Oleg Zherebtsov in St. Petersburg in 1993. Actually, Zherebtsov began to open hypermarkets in 1999. In 2002, in order to raise money for the development of the network, he sold 40% of the company to investor August Meyer. In the fall of 2009, after a conflict with Meyer, Zherebtsov sold his shares in the network for $110 million to TPG Capital and VTB Capital.

In 2010, the second shareholder conflict occurred in Lenta between August Meyer and his minority supporters, on the one hand, and the shareholders of TPG Capital, VTB Capital, and the European Bank for Reconstruction and Development, which joined them, on the other. In the fall of 2011, Meyer and his supporters sold their shares for $1.1 billion.

In 2014, Lenta held an IPO on the London Stock Exchange. At the end of 2014, the company ranked sixth among the largest retailers in Russia. In the RBC 500 rating for 2015, the company took 49th place.

— I was somewhat surprised to see these partnerships: in some you do not even have a controlling stake. Because after the conflicts in Lenta, in which many people were involved, individual participants, such as Sergei Yushchenko, told me that they had become much more cautious about partnerships. Did you have such a fear?

- Each partnership is the rights to one drug. There are currently only four such partnerships. And most of the drugs - 57 [most of them are still in the process of registration] - are produced by Grotex itself, without any partnership. Partnerships are separate formula and patent agreements that uphold the rights of the people who came up with the formula, researched it. But this does not apply in any way to Grotex LLC, to the balance sheet, to the rights to the plant. So I don't know. Sergei Yushchenko himself, as far as I understand, received a fairly large package for being an option manager, otherwise such a miracle could not have happened to him. He got into Lenta and got a fairly large option. He was neither the founder of the company nor a shareholder.

— Pharmaceuticals and the hospital segment, where you are now actively working, is very dependent on public procurement. You have not worked with this in retail, but here it is very important. Didn't this moment with the volume of government orders at the very beginning of your journey scare you?

- Walking along the unbeaten road, I kept waiting to see clashes or points of interaction with the state, I kept waiting and waiting for where they would appear. But, you will not believe, I discovered the complete absence of any contact with government agencies at the stage of product sales.

I expected to somehow ensure the supply of drugs to the army, or the Ministry of Emergency Situations, or hospitals, but, as it turned out, distributors and dealers are professionally involved in this. We sell to distributors, we have 116 contracts with drug distribution companies in Russia, these companies participate in tenders. That layer of wholesalers, resellers, or resellers, whatever we call them, these people perform a supply function, taking packs and boxes of medicines to every hospital. Spreading across Russia, we sell drugs 10,000 km away, to Khabarovsk or Vladivostok. I know that our preparations are already available in Tajikistan and Turkmenistan.

I was surprised how few corrupt ways of doing business exist in this industry. You will be surprised that the price of, say, a bottle of infusion solution is the same for almost the entire year. You can drop the price a little, raise it a little, but the fluctuation is around 4-5%. You can't even imagine to whom you can corruptly sell it! Diversification into these 116 companies has allowed us not to think about some things. Each company has its own regional significance, carries products.

— Price is important in tenders. You are in the northwest, and you are selling in Khabarovsk: even if your cost is lower than that of a local manufacturer there, logistics is added to your price. Moreover, as I understand it, it is not cheap, because the preparations - water - weigh quite a lot.

- It's a matter of mathematics. I thought that if we send our products to Novosibirsk, it becomes 7% more expensive for the cheapest medicines. Another thing is how much lower our cost is. If it is 10% lower than the guys who locally produce these products, then in the end we have a 3% advantage. I'm afraid to judge, but the question, in addition to prices, is probably also in consumer qualities or properties.

- You wanted to participate in the St. Petersburg pharmaceutical cluster, but your application was rejected because the project was not recognized as innovative.

- Yes, they did not recognize, but what to do. The pharmaceutical cluster was created mainly to reduce the initial costs incurred by the investor. And in this regard, we also tried to reduce our costs. But we were told that we were not innovative enough. Okay, someone made that decision, for God's sake. I bought this piece of land for $4 million, but then we raced twice as fast as everyone else.

Photo: Ekaterina Kuzmina / RBC

“Pharmacy is filled with classified superdocuments”

- Now Rostec, through its subsidiary Nacimbio, is seeking to monopolize the supply of a number of drugs through public procurement. How do you feel about such initiatives?

“As a supplier, the [Nacimbio] company does not seek to develop, but, in fact, consolidates assets or creates a situation where everyone is forced to sell to her, and she will be a reseller. There is no long-term in this decision, it is not fundamental. Since the market is very complex, it will not be possible to consolidate, monopolize it, this story will fall apart.

— Is the pharmaceutical market going down the path of consolidation at all? In the retail market, it was clear that it would gradually occur. And in pharmaceuticals, there are such different niches - is it even possible?

— Yes, of course, we are just at the beginning of the road. Understand correctly: 70% of enterprises in Russia do not comply with GMP standards. Their modernization, transfer to the GMP standard is a task that each company, whether public or private, will solve on its own. When most of the companies pass the stage of modernization and renovation, I am sure that mergers and acquisitions will proceed more dynamically in this market. When the industry turns into a business in terms of revenue, when the word EBITDA is on everyone's lips, when new IPOs start flashing... All this awaits the industry in five years. Now we still have a crisis, although this has affected the pharmaceutical industry to a lesser extent than other industries.

In addition, now Western companies are faced with the fact that their margins and operating profits are falling very sharply. Their cost of production has grown very significantly, if translated into rubles. And many drugs have a limit on the formation of the marginal price: the famous [abbreviation] Vital and Essential Drugs [vital and essential drugs]. As a result, there is an obvious trend towards the localization of production [by Western companies]. They have two obvious ways - either to create full-cycle sites, build plants from scratch, for which they do not have time, or localize them at existing capacities. But they cannot work at the old Soviet production facilities, they need GMP sites. This is another trend that is pushing the industry to become civilized and modern as quickly as possible. And our government has already, in my opinion, announced a fundamental transition to GMP for the third time. It kept giving a reprieve, saying here's another two years, here's another three years, and so on, it's done this several times in the last ten years, as far as I can remember. On January 1, 2014, there was the last Chinese warning. But, speaking slogans, one must still understand that the industry will not develop quickly, it is necessary to act more harshly. It's like with parking on the street: until you introduce a fee, there will be no point in investing in underground parking. Until the government starts shutting down old factories that don't meet quality standards, there won't be much incentive to invest.

Are you negotiating with foreign companies about contract manufacturing. Already have agreements?

— We are actively working with three companies to localize their drugs in Russia, negotiations are in the deep phase. But I have no right to disclose these companies. I am used to acting quite freely and, speaking about something, to openly name facts, data, figures. But the pharmaceutical industry is all riddled with secrets, filled with some kind of classified super-documents. You sign a huge number of non disclosure agreements from day one, everyone is afraid of disclosure.

— Are these companies from the top 10 largest pharmaceutical manufacturers in the world?

- I'm not sure about the top 10, but they are definitely in the top 20.

Why are you interested in this production? You said that your lines are loaded at 100% for several months ahead.

— No, our capacities are 100% loaded. But we are working on doubling production. The project that hangs behind me is a project to double the plant, in ten months we have to launch six more lines [to the six existing ones]. And this expansion project coincides with the interests of pharmaceutical companies in localizing production. This is first. Secondly, the opportunity to cooperate with these companies is an opportunity to touch technological know-how, to feel it, to test it, to see internal documents [of companies], procedures, principles, and somehow grow this culture within the company. This is a combination of what you will never get for money. After all, there is not only money capital, there is also knowledge capital. I am very sensitive to what has been done for decades. And no one will just tell you this at the university or in advanced training courses.

Photo: Ekaterina Kuzmina / RBC

"I saw the decline of retail"

— You stated that by the end of 2016 you want to take 30% of the market of liquid sterile preparations. As far as I remember, when you were in charge of Lenta, you tried not to make such clear predictions. Why did they do it now?

- I want to consolidate everyone around an ambitious goal. And I see that achieving this goal is possible. 30% of the market for liquid sterile dosage forms is absolutely tangible. Simply because the market is small. The food market is still much larger. For those drugs that we have already registered and sell, we easily reach a 25 percent market share in the first year of operation.

— And how do you assess the size of the market for all liquid sterile dosage forms that you are talking about? Infusion solutions, for example, are estimated at 5-8 billion rubles. in year.

- We did not count directly in money, we counted in pieces. But I wanted to say that our attempt to start making infusion solutions was just an attempt to create an infrastructure, since the water is the same, the air is the same, purification, analysis, and so on. Leaning on this segment, we immediately began to make ampoules [injectables]. And now the volume of ampoules exceeds the volume of production of infusions that we do. We are often considered to be an infusion plant, but this is not true. We started with this because it is the most liquid market.

Another line that we have already begun to produce and sell is a line of retail drugs: ophthalmology, nasal drugs. This is what we as consumers see in pharmacies. And in July we produced more ophthalmic drugs than injections and infusions combined.

— But in these markets you win your share more by replacing obsolete domestic production or imported, which have now become more expensive?

- Both. There is no single direction that we replace. We actively poach customers and say that we are cheaper, more flexible, faster, better, and so on.
If you lower the price by 5%, you are guaranteed to get a huge demand for your products. Such a high degree of sensitivity to the price, to the drugs that you sell. But this is a liquid market, the backlog and success of which is mainly in the structure of your cost. Therefore, we are still arguing whether we need another cleaner at the plant or not. We do not have a lawyer, for example, in the company. We try to outsource as many things as possible. This is the principle of a small number of people and a large productivity. For example, I'm not sure if our competitors consider revenue per employee or margin percentage per employee in rubles.

- Four years ago it was an open field, here the same weeds grew (points out the window). We launched the lines in July of that, 2014. The difference between a pharmaceutical company and a hypermarket is that, having huge operating costs, you often do not produce anything. You wait about a year for drug registration. Our revenue for this year will be close to 1.5 billion rubles. And in next year we want to double it, to make 2.8 billion rubles.

What Solopharm produces

The pharmaceutical company Solopharm (LLC Grotex) was founded by Oleg Zherebtsov in 2010, and in 2013 the company completed the construction of its own plant for the production of liquid sterile preparations in the Krasnogvardeisky district of St. Petersburg. In 2014, Solopharm received a license to produce medicines and released the first batch of drugs in the summer. The revenue of Grotex LLC, according to SPARK, in 2014 amounted to 195 million rubles, Zherebtsov's plan for this year is about 1.5 billion rubles. Now the plant produces hospital solutions, injections, ophthalmic, nasal preparations, ear medicines, sprays.

— You used to call your EBITDA margin 52%. What period is this for?

- In 2015, the order will be approximately the same.

- Is it a high rate? Do other big players have similar numbers?

— I didn't compare these figures, because not many companies talk about them, generally use the term EBITDA. But this figure indicates the huge potential of pharmaceuticals in our country and the lack of competition. EBITDA in retail is 7-8% of revenue and net profit [net profit] 1%, at best 2-2.5%. Here is the competition. And what is the competition here?

- I would like to clarify about investments: you named total investments in two stages of €74 million and in the third stage about €33 million more. Can you name these figures in rubles?

— I have been an entrepreneur since 1988-1989, when I started doing business in this city. Maybe, according to my old practice - inflation was 1000% in 1991 - I used to count in dollars or euros.

- Of all the funds invested, what is the share borrowed money?

- I would not like to talk about it simply because I do not consider it necessary to disclose it. I use bank financing, but it is not decisive.

- You received $110 million for your stake in Lenta. How much did you have left after paying off personal loans and other obligations?

- I have never commented on this issue and still do not want to do it.

— Did you invest in Grotex from the sale of Lenta, and later from the sale of Norma as well?

Photo: Ekaterina Kuzmina / RBC

Why did you decide to sell the Norma network? It was also quite a long project for you.

— I saw the decline of retail. I still believe that nothing new can be done in this industry. In my opinion, all new startups in retail will not give any significant growth in the near future. Three years ago, the idea that retail would stagnate seemed obvious to me. You see now what is happening with many companies. Either they show a negative Like-for-like [comparable sales in stores that have been open for more than a year], or they shrink their selling space very much, or leave some markets. And in general, the drop in consumption proves this.
I made an attempt to create supermarkets a long time ago, I urged the Lenta shareholders to do this - to develop a network of supermarkets. But only now Lenta began to develop them. Why it was not supported then, I cannot say. Perhaps the shareholders are stubborn. "Norma", in my opinion, was good project, but still its growth rate was significantly less [than Lenta's]. So I saw other possibilities. There was a period of my sailing for 4.5 years.

- Why was - you are no longer engaged?

- Not. Now I don't have time for anything. I work 12 hours a day, six days a week. I have been formally and actually the general director here for almost three years, since January 1, 2013, and I go to work here, like everyone else, from morning to evening.

- For you, this is some period after which you can devote time to the same sailing? You also had big plans.

— I had educational projects, they are still there: I am a member board of trustees European University, to which I devote some time. I also want to build an engineering university with good laboratories, technical schools, with foreign teachers. It should be a private university. I have this old dream. I wanted to do this, maybe in the mid-2000s. Now these plans are being postponed due to the fact that we have to invest part of the funds to expand the lines. I don't know, maybe it will take five years, seven years to start this project. Three more years to implement. Perhaps I still have 20 years of active life and I will have time.

- You are talking about stagnation in the retail market, but the same Lenta is now showing one of the best indicators on the market.

- Yes? I do not follow the activities of Lenta, to be honest. I have never been to these stores in five years. I cut this story, it passed. There was a period, 14 years of my life from the moment of foundation, when I had three loaders, an accountant and an assistant, it was an interesting period. It seems to me that the company as an entrepreneurial project has given obvious [successful] things. What you are listing now confirms this. I'm talking about the same thing now: you need to create an operating cost base [at Solopharm], an operating business model that would be sustainable for many, many years.

"Vedomosti" became aware of the owners of the St. Petersburg network of hypermarkets "Lenta". The founder of the network, Oleg Zherebtsov, owns only 43.5%, and 40% belongs to the American investor August Meyer. He became Zherebtsov's partner in 2002, when investment funds valued Lenta at $20 million. Since then, the company has risen in price by almost 50 times.
The revenue of the Lenta hypermarket chain this year should exceed $1 billion, but the owners of the company have so far preferred not to name themselves. But Zherebtsov told Vedomosti that he controls only 43.5% of the network, and his partner is a private investor from the United States, August Meyer: he owns another 40% of Lenta. The remaining 16.5% is shared by the company's seven managers, including financial director Sergei Yushchenko. This information was confirmed by a bank employee who will become one of the organizers of Lenta's IPO.

Zherebtsov started with wholesale trade, and the first store was opened only in 1993. By the crisis of 1998, the network included three stores with an area of ​​300-1000 square meters. m and one hypermarket under construction in St. Petersburg. To complete the construction, small shops had to be sold, recalls Zherebtsov. Three years later, Lenta already had two hypermarkets with a sales area of ​​about 12,000 sq. m each, and their total sales exceeded $100 million. Since 2001, Lenta tried to attract a portfolio investor, negotiated with the EBRD funds, Delta Private Equity Partners (formerly Delta Capital Management), and others, but did not agree on the price.

In 2002, friends introduced Zherebtsov to 39-year-old American August Meyer. I couldn't get in touch with him yesterday. The press service of Lenta explained that he avoids publicity. An acquaintance of Meyer said that he comes from a wealthy American family that owns banks, radio stations and other assets. In a rare interview with the St. Petersburg media, Meyer said that until 1998 he worked as a deputy prosecutor in San Diego and, in addition to investing in retail, rents out residential premises.

Zherebtsov says that before the deal with Meyer, he was the sole owner of Lenta. For how much he sold a 40% stake, the businessman did not say. According to him, for that deal, Lenta was valued more than investment funds were willing to pay (at the rate of $20 million for the entire company), but "not several times." Ekaterina Pantelyushina, director of corporate relations at Delta Private Equity Partners, only confirmed that the fund was negotiating the purchase of a stake in Lenta.

In any case, Lenta is now worth much more than Meyer paid for it. During the IPO, scheduled for late 2006 - early 2007, Lenta expects to raise about $300 million for 25-30% of its shares, a source close to one of the organizers of this placement told Vedomosti. That is, the chain's business can be valued at about $1 billion. By the end of the year, the chain will open stores in Novosibirsk, Astrakhan and Tyumen - there will be 14 in total. The company also plans to build hypermarkets at 11 sites it has. The network's financial indicators are not disclosed, except for annual revenue per 1 sq. m retail space- $11,317. For comparison: according to Lenta, Metro C&C has $11,194, Ramstore's hypermarkets have $6,722. The materials of the Karusel network say that it has this figure of $8,238, while Auchan ($11,287) and Mosmart ($11,111) have the highest figures. "This is very good level efficiency of use commercial premises. Above average, - Semyon Slutsky, deputy general director of Mosmart, comments on Lenta's revenue. “Lenta is very successful in St. Petersburg, and there is no reason why it will not be successful in other regions.”

Even before Lenta found a US shareholder, the chain announced that it was being advised on its strategy by former executives from Wal-Mart, the world's largest retail chain. Among them are former Wal-Mart senior vice president of commerce Bill Woodworth and one of its store directors, Rob Voss. Both were close friends of Wal-Mart founder Sam Walton. For more than two years they have been on the board of directors of Lenta.

Let's see what we have Russian left in trade:

Metro AG- the fourth - in the world trading network.
The founder of the network, Otto Beisheim, served during the Second World War as part of an elite unit of the SS troops - the 1st Panzer Division "Leibstandarte SS Adolf Hitler". In addition, Metro actively collects personal data from Russians.
He also owns Metro Cash & Carry, Real (in Eastern Europe sold to the Auchan retail chain),

Media Markt, Saturn, Galeria Kaufhof Groupe Auchan SA belongs to the French Association of the Mullier Family.

"OK"- network owner - LUXEMBOURG

General Director - Patrick Longuet, former director of Auchan. General since 2014. director of the OK Group network - Tony Denis Mayer, former top manager Wimm-Bill-Dann.

OBI(OBI, from the pronunciation of French hobby) is a German trading network.
The founder of the network is Manfred Maus from the North Rhine. The chain's first store opened in 1970 in Hamburg. The name was purchased from French merchants.

"ESSEN"(German Food) - a network of hypermarkets in Tatarstan. Founded in 2003 by Baryshev Leonid and Maheev Vadim with the help of specialists trained in the French chain Carrefour.

"Alphabet of taste"- Established in 2003.
The founder is Diamond Solutions Inc. (registered in the British Virgin Islands).
In 2014, it acquired the Spar retail chain near Moscow.

Spar is a Dutch supermarket chain headquartered in Amsterdam.
The network's founders Maxim Koshcheenko and Oleg Lytkin control over 50%.
The remaining 43% stake is in the hands of V.M.H.Y. Holdings Limited, owned by the former owners of Expobank.
Divisions: " 7I am a family”, Spar, “Idea”, “Norma”, “Olivier”, owned joint-stock company Smart Value Retail.

"The Seventh Continent"- OAO. The headquarters is in Moscow. Founded in 1994.
The main owners are entrepreneur Alexander Zanadvorov (74.81%), the family fund of the governor of the Tula region Vladimir Gruzdev (10%).
Some of the company's shares are traded on the RTS and MICEX. Until 2008, 74.81% belonged to State Duma deputy Vladimir Gruzdev.
Parent company formally: Cyprus: Pakwa Investments Ltd.

Company "Ribbon" Although it was founded in 1993 in St. Petersburg, it is registered in the British Virgin Islands.

fix price(chain of stores)
The ancestor of the concept is considered to be Frank Woolworth. The concept of the store "everything at one price" has become widespread in America and Western Europe.
Leading operators: Dollar tree (USA), 99 cent onlly (USA), Dollarama (Canada), Daiso (Japan), Poundland (England), Euroshop (Germany).

X5 Retail Group- network owner "Pyaterochka", "Crossroads", "Carousel", "Penny", "Paterson", "Island" and Internet project "Order table E5.RU" .
The company is registered in the NETHERLANDS. The largest stake in X5 (47.8%) belongs to the co-owners of Alfa Group - Mikhail Fridman (21.9%) and others,
the founders of Pyaterochka have 21.2% of the company.
Acting Chief Executive Officer - Stephane DuCharme
The main owner of the company - the Russian holding AFK "Sistema" 53.47% of the shares - again privatizers!
At the end of 2008, it entered the list of companies that received state support during the crisis. - the work of the 5th column.
To buy "Kopeyka" from Nikolai Tsvetkov, she took a five-year loan from Sberbank without property security. - again the 5th column.
The remaining shares are freely floated on the New York Stock Exchange, London Stock Exchange, Frankfurt Stock Exchange, Berlin Stock Exchange, Munich Stock Exchange

"Dixie" used to be called "Uniland" formed in 1993 - Headquarters - in Moscow. In 2004, she sold a 30% stake to Citicorp International Finance Corporation, Cube Private Equity, Van Riet Capital and others. The guarantors were Renaissance Capital, Trust Investment Bank and Deutsche Bank.

"Victoria" - previously also managed "Quarters", "Cheap" and "Family Piggy Banks", but in 2012 "Victoria" was absorbed by "Dixie".

TECHNOPOWER
Control over the network belonged to the Dauria group, i.e. Mikhail Kokorich (former to CEO lumber company "Ilim Timber Industry").
In 2012, the Dauria group sold the company to financial investors.

Owners MTS
The main owner of the company is the Russian holding AFK Sistema, which, as of December 27, 2013, owned 53.47% of the shares. The remaining shares are freely floated on the New York Stock Exchange (stock ticker MBT, one ADR contains two ordinary shares), the London Stock Exchange, the Frankfurt Stock Exchange, the Berlin Stock Exchange,
Munich Stock Exchange,

MGTS
The largest shareholders of the company: OJSC Mobile TeleSystems (55.738% ordinary shares), and its subsidiaries ZAO Sistema-Invenchur (24.204%),
Comstar One Ltd. (14.195%)

AVITO.ru
Developed by SWEDISH online auction site Tradera.com, acquired by market leader eBay.
Merged with OLX.ru and Slando.ru in 2013

Screams, broken glass doors, guards getting into a fight… This is not a showdown of the mid-1990s - it takes place in St. Petersburg in September 2010. Two solid foreign companies, the main owners of the Lenta hypermarket chain, disagreed on corporate procedures, and now one group is storming the office to kick out competitors. How did they come to such a life?

To begin with - about the alignment of forces. Foreigner August Meyer (41% of the shares), his partner Dmitry Kostygin (1% of the shares) and now the former general director of the network Sergey Yushchenko play on defense. On the attack is Luna Holdings, which owns a 30.7% stake in Lenta. It, in turn, belongs to the large American fund TPG and VTB Capital, a subsidiary of VTB. Luna enjoys the support of a number of minority shareholders, including the European Bank for Reconstruction and Development (EBRD).

There is something to fight for. Lenta is one of the largest in the country retail chains, it has 37 hypermarkets in 18 cities, which last year provided 55 billion rubles in revenue. Before the crisis, Lenta's valuations were in excess of $2 billion, and investors were lining up to get a stake in the company.

On that September day, the victory went to Luna Holdings - its private security company managed to seize the office of Lenta, expel Yushchenko from there and put his man, the Dutchman Jan Dunning, who has INSEAD behind him, 10 years of work in the European network of Aldi discounters and five years of experience in Russia. After that fight, the war turned into a "cold" phase: the parties filed numerous lawsuits against each other in Russia, London and the British Virgin Islands, where Lenta Ltd., the parent company of the holding, is registered. The confrontation between the two groups of shareholders continues.

Successful investment

Lenta was founded by St. Petersburg entrepreneur Oleg Zherebtsov, who has been trading since 1993. At first, he opened small-scale wholesale warehouses that were usual for that time, by the end of the 1990s he had acquired a supermarket, and in 2001 he decided to build a really large store, the first of its kind in the northern capital, but he did not have enough money for the project. A familiar entrepreneur, Dmitry Kostygin, then brought Zherebtsov together with August Meyer, who had recently arrived in Russia from the USA, who readily acquired 49% of the company.

A new investor bought a stake in a completely small business- Analysts estimated Lenta at only $20-30 million, but the money they brought in was enough to complete the construction of the hypermarket and purchase land plots for the opening of new outlets. Lenta began to build a hypermarket a year, and sometimes more. Moreover, Meyer was a convenient partner - the presence of a foreign shareholder helped to negotiate with Western banks and counterparties, and he did not interfere in operational management. How did he get to Russia at all? This is an interesting story that sheds some light on the cause of later corporate conflicts.

Meyer was born in Illinois and grew up in a very wealthy family. His father, August Meyer Sr., heir to Midwest Television and financial company First Busey, in 1991 was even included in the list of 400 richest Americans Forbes. The future shareholder of Lenta first studied history, then passed the exam for a lawyer and worked for 10 years in the prosecutor's office in San Diego. In America, Meyer never acquired any own business, no family. He traveled widely and read the books of his favorite author, Ayn Rand, a Russian immigrant who sang of free enterprise. It is not surprising that one day he decided to call on Rand's homeland - in St. Petersburg.

Since then, he has remained here. He married a Russian woman, had children, and even renounced American citizenship. Why? “America is sinking like the Titanic, but Russia has a future,” Meyer says in an interview with Forbes. He recalls how in St. Petersburg, right in the middle of the street, a stray dog ​​tore his shirt, and a girl who was watching the scene from a street kiosk came out to him with a needle in her hands and helped to sew up his clothes. “In America, this is hardly possible,” Meyer sums up. This is a lovely drawing. But there is a more practical explanation: the US taxes are too high for those who do business abroad. Meyer says that he considers himself “practically Russian”, but he never learned the language, and did not accept Russian citizenship - the businessman has a passport from Saint Kitts and Nevis, a small island state that, for a small amount, without delay, issues citizenship to everyone.

In Russia, Meyer initially engaged in buying and leasing communal apartments and even founded a small hotel chain called Rand House - in honor of the author of the bestseller Atlas Shrugged. Financial savings, however, allowed him to do something more ambitious. It was then that Kostygin arrived in time.

Kostygin cannot be denied entrepreneurial acumen. While still a schoolboy, he went to Moscow for jeans and sneakers, which he then resold in Leningrad. While studying at the Military Medical Academy in the early 1990s, he helped foreigners rent hotel rooms, sold them military uniforms, boots, earflaps, and even “kopeck pieces” for telephone booths ($1 each). Then, as he himself says, "he invested in one thing, then another."

The decision to translate and publish Ayn Rand's book can be considered his most successful project. Although the novel did not bring money to Kostygin, thanks to him he met the millionaire Meyer. He was just looking for an opportunity to perpetuate the memory of a native of St. Petersburg by opening something like a house-museum, and at the American Ayn Rand Institute he was given the contacts of Kostygin, a local admirer. They immediately became friends, despite the difference in age. Having brought the American to Zherebtsov and organized the deal, Kostygin received, according to Forbes, a 5% stake in the network as a reward for services, which he later partially sold, having gained about $ 20 million.

Meyer likes to say that he understands little about business and numbers. He invested money and for almost six years quietly watched his share rise in price, turning from tens of millions of dollars into hundreds.

First fight

For the time being, the founder of Lenta, Zherebtsov, did an excellent job of managing. “He is a born retailer,” says one of the market participants. - He enters the store and immediately sees what needs to be done to increase sales: how the flow of visitors goes, where to change the lighting, where to put apples on the other side. But with corporate governance he doesn't have much." Zherebtsov himself, in an interview with Oleg Tinkov (for a program on the Russia.ru website), admitted: "We did not think that we would create and sell companies - we were going to have money from operating funds."

In 2006, Zherebtsov walked at Meyer's wedding, and a few months later the partners quarreled. Bored with routine business processes, Zherebtsov launched his personal project from scratch - the network of small Norma stores, which, however, did not contradict the charter of Lenta. Meyer didn't like it. In December of the same year, instead of Zherebtsov, the retail chain was headed by the financial director of Lenta Sergey Yushchenko.

At that time, the company planned to issue additional shares and sell 15% on the stock exchange, but several large investment funds said at once that they were ready to buy a stake in the promising network even without an IPO. Meyer strongly supported the idea of ​​selling the package to Western funds, while Zherebtsov was against it and offered to buy the shares himself. "He was afraid that his share would be diluted and he would lose control of the board of directors," Kostygin said. Now Meyer and Kostygin have already refused: they believed that Zherebtsov simply did not have the funds necessary to buy out the package. In May 2007, the EBRD acquired an 11% stake for $125 million.

And in January 2008, the conflict flared up again. Immediately after the New Year holidays, Zherebtsov, who devoted more and more time to his favorite hobby - yachting - decided to intervene in the management of the network: he informed e-mail Sergei Yushchenko and several other associates of Meyer that they were fired. Urgently passed two boards of directors - in different compositions; on one, Zherebtsov appointed his friend Vladimir Senkin as head of the company, on the other, Meyer retained the position for Yushchenko. Litigation began.

By April, however, the conflict came to naught - the parties agreed to elect a compromise figure, Alexander Bobrov, development director in charge of the construction of new stores. The Russian economy was then on the rise, the shares of retail chains were growing in price - it was foolish to argue when the chance presented itself to profitably sell the business. Meyer and Zherebtsov agreed to jointly cede their shares to one of the potential investors - the American network Wal-Mart, the French Carrefour, the Finnish Kesko and the Croatian Agrokor were eyeing Lenta. Buyers offered an incredible price for Lenta - valuations of $2 billion and more were discussed.

“It took us literally a couple of months to close the deal,” says Kostygin, who could have earned over $20 million for his 1% stake. In the fall of 2008, a crisis broke out, and negotiations stopped. Of all the co-owners of Lenta, Zherebtsov was in the worst position. The crisis caught the businessman in the midst of a round-the-world regatta, which was unsuccessful for his Kasatka yacht: at three stages, the Zherebtsov team was the last to arrive, and it was generally taken to the port of St. Petersburg in tow. The shares of the founder of Lenta were pledged in banks to finance the personal project Norma. The founder of Lenta faced a tough choice - either to urgently find a buyer for the shares, or they would go to the banks.

New partners

In October 2009, Zherebtsov sold 35% of Lenta to a consortium of investment funds TPG and VTB Capital for only $110 million, after paying all the debts he had only a quarter of this money left. The deal was difficult, negotiations dragged on for several months - Zherebtsov and Meyer at that time did not talk to each other at all, and investors had to communicate with each separately. (Zherebtsov declined to be interviewed by Forbes for this article. “I don’t do much business, I travel more, I climb mountains,” said the Lenta founder, who has managed to travel around the world on a yacht in the past three years and open 17 Norma stores. )

It would seem that Meyer got what he wanted: the American investment fund became a major shareholder of Lenta. However, in April 2010, relations between the new partners began to heat up. According to the terms of the October deal, Meyer bought a small part of Zherebtsov's stake from TPG, but he did not receive this share on time. In May, TPG and VTB Capital unexpectedly blocked Lenta from receiving a €200 million loan.

“I think they deliberately interfere with the work of Lenta,” Meyer says indignantly. - Why? Ask them." According to Meyer, who now spends most of his time in the Virgin Islands, where the courts are going on, the new shareholders want full control of Lenta, although the agreement with them seems to say about joint management. “I only demand the fulfillment of agreements, and I will not stop, I will go and go forward like a Terminator,” Meyer raises his voice.

According to the mentioned shareholder agreement between Meyer and TPG, Meyer had the right to return Sergei Yushchenko as CEO, but only with the approval of the company's board of directors and only until August 31. At the end of May, the council took place, but the representatives of the new owners left it ahead of schedule and did not sign the decision, which did not prevent Meyer and Kostygin from declaring the council valid and, on this basis, expelling Jan Dunning from the Lenta office. Their triumph was short-lived - in September, the events described at the beginning of the article played out. Dunning was brought back into the company's office and assumed operational control (his contract has now expired).

Meyer and Kostygin now say that they are the victims of an "oligarchic fund." TPG Capital truly manages a whopping $47 billion in capital. TPG is headquartered in Fort Worth, Texas, and the company's aggressive style has repeatedly brought to mind the American saying "Don't mess with the Texans." And although Time magazine called TPG founder David Bonderman and his partners “shameless predators,” it’s hard to deny them success - the restructuring of troubled companies that are not very interesting to other investors brings in income seven or even ten times more than the invested funds.

However, the last thing any investment fund is interested in is a shareholder conflict. The task of investors is to increase the capitalization of the acquired company as quickly as possible. That is why TPG, in conflict with Meyer, is supported by the majority of shareholders, including the EBRD. Why does the strategy for capitalization growth not suit August Meyer?

Human factor

For many years, Meyer sat silently on the boards of directors at Lenta. “He was even less active than a shareholder should be,” recalls one of the Lenta employees. - But in 2007, everything changed dramatically, he suddenly became intolerant, refused to compromise. He began to do some crazy things, arranged a war with Zherebtsov, although there was no need for this.

First, the war with Zherebtsov, whom Meyer suspected of wasting Lenta's resources on a personal project, and now with TPG. VTB Capital and TPG claim they are ready, together with Meyer, to look for compromise solutions, for example, the candidacy of a third director - one that would suit everyone. However, Meyer does not make contact. "I can't trust them anymore," he explains.

“It seems to me that for August everything is either black or white. If you are his friend, you are right in everything, and if you disagree with him in something, you are immediately a crook and a scoundrel for him, ”says Vladimir Senkin, who was the general director of Lenta for some time. That quality may have helped when Meyer was at the U.S. Attorney's Office (he recently wrote on Facebook that he misses the job), but business needs flexibility.

And Meyer, it seems, is always adamant. One of the minority shareholders of Lenta recalls how Meyer, having lost his temper, jumped out of the restaurant, in fact, even before the negotiations began, because the interlocutor, not immediately agreeing with his demands, offered to discuss them. In addition, Meyer too often relies on the opinion of his friend Kostygin. “He is like Rasputin under the emperor,” says one of the participants in the conflict. - Meyer constantly says: Dima knows better. TPG and VTB Capital had claims against Kostygin and Lenta director Yushchenko. “We were dismayed when Kostygin secretly booked himself a $1 million a year salary as a part-time consultant,” said Dmitry Shvets, TPG Russia COO. Perhaps, here lies the true causes of the conflict of shareholders.

Due to the fact that the board of directors was paralyzed for more than six months, the chain opened only one store in 2010, for the first time in rented space. Nevertheless, from January to October 2010, Lenta's sales grew by 22%, EBITDA - by 44%, and the debt burden was reduced by 40%. The business is developing, the value of the company is growing.

Is it worth paying attention to personal likes and dislikes when it comes to billions again? If Meyer delved into financial indicators, his answer would be obvious.