With the help of an EBRD equity investment, Buslik, a leading Belarusian children's store, plans to open several new shops, bringing affordable high-quality children's food and goods to more families in Belarus.
According to Belarusian tradition, a stork brings good fortune to the village it settles in, while in western culture the stork is commonly associated with childbirth. 'Buslik', which is Belarusian for 'little stork', is thus a well-chosen brand name for the leading Belarusian children's retailer.
This is the first time the EBRD has taken a stake in the country's retail sector and it represents the Bank's third corporate equity investment in the last 10 years. The Bank's 25.5 per cent stake will also entitle it to representation on the group's board of directors.
Owned by a group of Russian investors as well as by local partner and CEO Sergey Misyachenko, Buslik is part of the West Ost Union Commercial Industrial Group JLLC (WOU) which, in addition to operating a chain of 12 supermarkets, is also a major baby-food distributor in Belarus.
A modern shopping experience
The Buslik stores aim to provide everything children need from the time they are born until they become teenagers. This includes baby food, clothes, footwear, toys, books and prams.
"We have been impressed with the quality of the stores and products on offer, which include both imported and locally produced products," says EBRD Senior Banker Irena Stanwell. "Buslik currently offers the largest range of children's products in Belarus and is renowned for its excellent customer service."
WOU currently holds an estimated 4 per cent share of the market for children's goods and around 30 per cent of the infant-food wholesale market.
"This financing is very important because it supports our expansion plans," says Mr Misyachenko, Buslik's CEO. "We are aiming to keep focused on customer service and to react to changes such as the entry of strategic players into the market," he stresses, adding that the group wants to strengthen its position as a leader in the retail sector.
The group's shareholders have a lot of experience in the children's sector and it is the management's expertise and dedication which most impressed the EBRD team working on the project. "The company management's strong track record and commitment to good corporate governance principles played a key role in the Bank's decision to make this investment," says Ms Stanwell.
Investing in future customers
Favourable demographic trends which have seen increasing birth rates since 2004 combined with the Belarusian government's family-friendly social policy all bode well for the company's potential development and expanding clientele.
"We believe that Buslik has all the prerequisites to develop into a sizeable chain all over Belarus," says Valdas Vitkauskas, EBRD Head of Office in Minsk. "In doing so it will have a strong social impact as its expansion into the regions and its wide network of stores mean it will be able to reach even remote consumers, offering a wide mix of goods at competitive prices."
Retail is one of the most dynamic sectors in Belarus, boasting a growth of 17 to 20 per cent in recent years, and the country's only sector with predominately privately owned companies. The EBRD views retail commerce as vital to Belarus's development of a successful market economy.