The first foreign store network Fix Price will be opened in early April of 2016 in Georgia, said the General Director of the network Dmitry Kirsanov. To open the first foreign point will be the local franchise partner, which the company did not call. Later will run the shop Fix Price in Kazakhstan, partner of this country are also found, said Kirsanov. Partners in the CIS countries can open unlimited number of stores under the brand network, the number depends on its capabilities and needs in the region, says a top Manager.
“Brand Fix Price registered in almost all European countries, — said Kirsanov. — If this year we will find partners in Armenia, are technically ready to open a store there. Georgia, Kazakhstan and Armenia — the countries where the customers are not severely different from consumer behaviour”. Now the company is considering opening in all the nearby countries of the former USSR, he explains. In the future, Fix Price, you may go to the Baltic countries. “But it’s a bit more complicated than going out, for example, in the countries of the Customs Union where there are no barriers, real boundaries and duties,” says Kirsanov.
In neighbouring countries direct competitors to Fix Price, in fact, will not be — the model of the hard discount stores with fixed prices practically implemented even in Russia, said General Director of “INFOLine-Analytics” Mikhail Burmistrov. The nearest competitor Fix Price, network Oscar Hartmann “at the same Time” only began to develop and now has only a few dozen points. Last fall in Russia came the first foreign network such format German Euroshop. However, now has, according to the official website, only 13 stores in the Moscow region, Nizhny Novgorod and Saransk.
All for one price
Who invented the format
The inventor format stores that are all sold at the same price, considered Frank Woolworth’s. In 1877, 25-year-old Woolworth, who worked in new York store Augsbury and Moore Dry Goods Store, came up to lay unsold goods on the table with the sign “All for 5 cents”. The sale proved to be popular with buyers and the suppliers. In 1878, Woolworth opened a store of goods at the same price of Woolworth’s Great Five Cent Store in Utica, new York.
The world’s largest chain of format fix price, Dollar Tree, was founded in the USA in 1986. All the products in it are sold for a dollar. The network now includes more than 5 thousand stores in the U.S. and Canada. Other major network – Japanese Daiso (2.8 thousand shops in Japan and 860 in other countries), canadian Dollarama (900 stores) and British Poundland (over 500 stores).
For those Russians
Fix Price — the largest Russian network of shops fixed prices, the majority of goods now costs 50 rubles. the First stores were opened in 2007. The main shareholders of the company — the co-founder of the network “Kopeyka” Sergey Lomakin and Artem Khachatryan. Among the shareholders of the investment Fund Quadro Capital, a small fraction is ten top-managers of the network, including CEO Dmitry Kirsanov. The chain’s earnings in 2015, according to the company, amounted to 61.2 billion rubles (including VAT). Network two years in a row enters a rating of “50 fastest growing companies”.
Serious competitors to Fix Price yet. In 2014, the founder of KupiVip Oskar Hartmann with partners began to develop a similar format for the network “Simultaneously”. In 2015, the proportion became the President of “Interros” Vladimir Potanin. Assessment, owned by Potanin, a Cypriot company, acquired about 38% only the owner of the network, offshore Za Odno Ltd. Last year the company “Simultaneously” opened 10 new stores per month in cities with a population of not less than 50 thousand inhabitants. Also in 2015 a few shops with fixed prices under the brand name Fan Price was opened by the founder “pjaterochki” Andrey Rogachev. However, the instability of the ruble led to the fact that the company abandoned the format of fixed prices.
In 2015 in Russia opened the first stores of the network of the German Euroshop. Euroshop is one of the leading European chains of shops fixed prices (all products are out there for €1 Euro), under which are 225 stores in Germany.
The franchise for three years
Fix Price now has 2097 shops. Of these, about 400 work on franchising. Operating company network, “best Price”, always gets 25% of the share capital of the company-the franchisee. With the majority of franchisees (approximately three-quarters of stores) “best Price” also negotiates the right of redemption of their store after three years, according to a specific pricing formula which was not disclosed.
Lump sum payment (one-time payment to the owner of the franchise when buying), according to the company, such scheme is 300 thousand rubles, royalty — 3-4% of turnover. The opening of one store with an average sales area of 200-300 sq. m costs about 5 million rubles, the payback period is less than a year, says Kirsanov.
There is another scheme of work with partners in which the parent company does not redeem partner points. In this case, the amount of the lump sum payment and royalties higher. Now according to this scheme open shops in regions in which in the next five years Fix Price isn’t going to develop independently, for example in the far East. “There is not yet reach our logistics arm, so those whom we are now engaged, is a project of “perpetual franchise” jokes Kirsanov.
The decision on whether “best Price” to buy up overseas stores, is still pending, this issue the company will discuss with foreign partners in a year after the start of the pilot stores.
Only in 2016 Fix Price plans to open about 300 stores in the next few years to run for 300-500 points. Development potential in Russia for the network is estimated at 5 thousand shops.