The Russian footwear retailer Obuv Rossii is changing names to mark its diversification away from shoes. The company is removing the word Obuv (meaning shoes in Russian) from its name to become simply OR for the main operating unit and OR Group for the parent company. Even the stock ticker on the Moscow bourse is changing from OBUV to ORGG. The abbreviation, however, aims to maintain continuity with the old name.
The Obuv Rossii brand was launched in 2003 to mark the company’s focus on footwear retailing. But, the company now plans to go beyond the fashion segment and become a universal retailer thanks to a new format and its online marketplace.
It noted that it underwent ”significant changes” in 2019-2020, thanks to the improvement of its retail concept, a diversification of its product range and by turning its stores into a service point through the development of financial services, which now make up an important part of its revenues.
The company sells products under its brands, which are primarily fashion items, as well as goods of third-party brands. The share of partner brands are estimated at 30 percent of all retail sales and vary from cosmetics to household appliances, according to Natalia Pauli, head of public relations.
By 2025, the share of partner brands is expected to reach 60 percent, while the size of the fashion segment would drop to 40 percent.
The new strategy is expected to help the company significantly expand its product range within the next five years, double retail revenues, and boost its online business. The company anticipates digital sales to represent half its sales by the middle of the decade.
”We have been considering such changes for a long time. In 2018, we reviewed our strategy” by no longer opening stores in malls and focusing on small towns instead, said Anton Titov, the chief executive of Obuv Rossii Group.
”Since 2019 we have done a lot of work to improve our business model by launching our own marketplace, and the Covid-19 pandemic has accelerated many business transformation processes,” he added. The company no longer wants to focus on shoes but wants to expand its activities and seize new growth opportunities, he pointed out.
As of today, nearly two-thirds of the company’s stores have been refurbished into multibrand and multicategory stores, according toTitov.
At the end of November, the company had a network of 843 stores, of which 175 were franchisees, operating under the banners Westfalika, Peshekhod, Rossita, Emilia Estra and Lisette. It also produces apparel and footwear under the active lifestyle brands of S-TEP, all.go and Snow Guard and owns two manufacturing facilities in the Novosibirsk region.