DETSKY MIRS LAUNCHES A NEW PRIVATE LABEL IN DIAPERS

Moscow, Russia, 27 February 2020 – Detsky Mir Group (“Detsky Mir”, the “Group” or the “Company”, MOEX: DSKY), Russia’s largest specialised children’s goods retailer, announces the launch of Manu, a new private label in diapers.

Detsky Mir is rolling out the new PL brand in the children’s goods markets of Russia, Kazakhstan, and Belarus. Developed through a partnership with Unicharm, Japan’s largest manufacturer of diapers, Manu offers premium Japanese quality for a medium price, giving it a competitive edge over other global brands. Currently, the Manu assortment consists of ten SKUs available in five key sizes, from Newborn to XL, and coming in two packaging sizes.

During 2020, the Company will expand the assortment marketed under the brand to include an additional category, Diaper Pants, and has plans to actively push the Manu PL brand through promotions and TV commercials.

The Company has been successful in the past in introducing private labels for newborns: in late 2016, Detsky Mir developed and launched its first private label in hygiene, BabyGo diapers. This 90% Russian-made brand is positioned in the low-price segment, achieving a share of 6.3% in total category sales for 2019. The Company is planning to gain momentum with the BabyGo PL brand by offering an even better value for money (without increasing the price), as well through rebranding and smart promotions.

“Pushing private labels is a key strategic priority for us, with the Detsky Mir chain currently offering 8,000 private label SKUs and their share in the Company’s 2019 sales growing by 3.3 p.p. YoY to 33.1%. With one out of every three items on a Detsky Mir ticket being a private label, we see considerable growth potential for private label sales in Toys and Diapers. Through Manu, Detsky Mir is offering its customers an exclusive, high-quality, low-price product while also achieving higher sales margins. Our mid-term target is to double private label sales in Diapers,” commented Vladimir Chirakhov, PJSC Detsky Mir Chief Executive Officer.

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Detsky Mir Group (MOEX: DSKY) is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir and the Detmir.ru retail chains, the ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The company operates a network of 766 Detsky Mir stores located in 293 cities in Russia, Kazakhstan and Belarus, 4 Detmir.ru stores, as well as 49 ELC, 13 ABC and ten Zoozavr stores as of 31 December 2019. Total selling space was approximately 843,000 square meters

Detsky Mir Group’s shareholder structure as of the date of this announcement is as follows: PJSFC Sistema[1]  – 33.38%, Russia-China Investment Fund (RCIF) [2] – 9.0%, free-float – 57.62%. 

Lear more at www.detmir.ru, elc-russia.ru, ir.detmir.ru

(1) Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children’s goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality.

(2) RCIF, an equity fund established by the Russian Direct Investment Fund (RDIF) and China Investment Corporation (CIC), holds its stake in PJSC Detsky Mir through its funds: Floette Holdings Limited and Exarzo Holdings Limited.