Russia’s biggest shoe manufacturer, Unichel, is restructuring its retail network to mitigate the impact of the Covid-19 pandemic.
At the beginning of 2020, Unichel ran 600 stores in 250 cities in Russia and Kazakhstan, but last year it shut down 40 stores and opened 30 new ones, in different locations, Vladimir Denisenko, the head of Unichel said. In 2021, 15 more stores are slated to be closed, and 20 to 25 are due to be opened.
The company has focused on standalone stores in shopping streets, which have been less affected by the pandemic than shops in malls, where customer traffic has yet to return to pre-crisis levels.
“We cannot afford running non-efficient stores because we have low mark-ups so that prices remain accessible for customers,” Denisenko explained.
“The Russian population’s purchasing power has decreased as a result of the pandemic,” he added. “Customers need low prices, and they opted for our products.”
In 2020, Unichel cut footwear production by 17 to 18 percent, but revenues only declined by 3 percent. According to Denisenko, the company managed to offset the decline in output thanks to its inventories.
The company typically produces 3 million pairs of shoes a year, focusing primarily on leather shoes.