Deliveries of Estee Lauder, L`Oreal and Procter & Gamble products have resumed to Arbat Prestige stores. The entire first quarter was selling last year’s leftovers. Together, these three brands accounted for 2007% of the chain’s sales in 11,8, with Estee Lauder and L`Oreal leading the way with 5,15% and 4,4% shares, respectively. Khomenko refused to disclose the terms of the new contracts, noting that “the network received favorable terms.”
But the restoration of relations with suppliers saved Arbat Prestige only part of its problems. On June 20, the parent company of the Arbat & Co LLC network will have to redeem bonds for 1,5 billion rubles, so Khomenko does not exclude that part of her real estate will be sold. According to him, Arbat Prestige owns 21 stores in Russia, including 16 in Moscow and five in St. Petersburg. In addition, the sale of the entire Ukrainian division “Arbat Prestige”, which includes 28 stores that lease their premises, is being considered. According to Aleksey Mogila, director of the retail real estate department at Penny Lane Realty, the chain will be able to raise $ 8-11 million for the premises in Atrium alone if it is sold. But part of the real estate is mortgaged to banks, recalls a source close to Arbat Prestige.
“So far, the company has not provided the market with information about the real existence of funding sources. The probability of default on bonds remains, ”says Pavel Zhavoronkov, analyst at Sovlink Investment Company. Yesterday Arbat Prestige bonds could be purchased at 65,35% of par. In the first quarter of 2008, Arbat Prestige’s revenue amounted to $ 79,4 million (22,3% lower than in the first three months of 2007 ).
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