NATURA SIBERICA: 30% OF THE STORES WILL NOT BE REOPENED

The restrictions that were imposed on the offline trading and the coronavirus pandemic significantly affected the retail traffic. The number of customers in the food segment decreased by 25-50%, and the retail chains, offering the non-food products, in most cases completely stopped working. The unpredictability of the events and the uncertainty, hanging over every next day, force the entrepreneurs to wait for the state support or to transform the business on their own.

The founder of the "First Decision" company, Andrei Trubnikov, announced his intention to close almost a third of his stores. The organization has gained fame in Russia and abroad thanks to such brands as the “Recipes of Grandma Agafia”, “Natura Siberica” and “Planeta Organica”. All of them specialize in the production of the eco cosmetics and household chemical goods. Before the introduction of the restrictive measures, 45 outlets of “Natura Siberica” and 41 “Organic Shops” as well as several stores under other names of the brand operated in Russia.

In the current situation, Trubnikov believes that it is necessary to switch the attention to the online trading, and to reorient the business to the development of new products. Are there any serious prospects in the retail industry? Due to measures, related to the COVID-19 pandemic, the stores have been already closed.

Even after the measures that have been taken are lifted, it will be impossible to make the offline trading operate in the previous way, Trubnikov believes. The buyers will be afraid of going somewhere and getting infected with something.

Now all the retail points, except the online shops, are technically closed. According to the company, the employees receive a third of the previous salary due to a reduction of the working hours. Many of them work remotely or perform other functions. According to the founder of the distribution network, if previously online sales brought the company about 5-7% of profit (the company started operating its online store in 2017), and the main revenue (40%) came from the retail, now the situation should change dramatically.

“Natura Siberica”, according to Trubnikov, is considering two scenarios.

According to the positive scenario, the company will begin developing products for home spa treatments, will produce antiseptics and close the stores that do not bring much profit. In the worst case, the company will leave only five stores (including a retail outlet on Tverskaya Street in Moscow), and will close the rest.

However, considering the fact that the company managed to conclude a deal with a number of partners to reduce the rent payments, the possibility of the optimistic scenario still remains.