The largest Russian retailer Melon Fashion Group is negotiating with shopping centers to launch a new chain of Idol clothing stores on the market. A pilot project in the “affordable premium” category can start operating in the fall. The Russian company expects to replace the departed Inditex brands – Zara and Massimo Dutti, and somewhere to make up for the lack of &Other Stories, H&M and Uniqlo for Russian fashionistas. In more distant plans – a few more novelties.
The fact that Melon Fashion Group is discussing the launch of a new retail chain was told to Fontanka by several participants in the retail real estate market. According to one of them, while the retailer is actively looking for premises in Moscow, it is also thinking about St. Petersburg. This is a new premium brand, which is positioned as a replacement for the brand Inditex Massimo Dutti, he says.
Another interlocutor of Fontanka, who is close to a large shopping center in St. Petersburg, also knows about the retailer’s plans, but notes that so far the negotiations are preliminary. According to him, the company plans to open the first outlets under the Idol sign in October-November. The brand is positioned as an analogue of Massimo Dutti, the source confirms.
Evgenia Khakberdiyeva, Regional Director of NF Group’s Retail Department, also confirms that Melon Fashion Group has plans to launch a new women’s clothing brand. Stores are scheduled to open in 2024. So far, they are only looking at the sites, they are choosing good options. They look at all options, but the shopping center is a priority,” she says.
The Melon Fashion Group itself did not comment on development plans. “Like any successful company, we are considering various development options. It is still premature to talk about specific plans and figures,” the press service said.
The application for registration of the Idol brand was filed at the end of November 2022, according to SPARK data. It will become the fifth brand in the portfolio of Melon Fashion Group (now the company is developing the Love Republic, Zarina, be free and sela networks). According to Fontanka, the retailer is now approving sketches for the first Autumn-Winter 2023 collection and is preparing to order its production in Southeast Asia.
As follows from the presentation of plans for the development of Melon Fashion Group (Fontanka has at its disposal), Idol is looking for premises of 300-400 sq. m. The new project will work in the “affordable premium” category with an average bill of 10,000 rubles. That is, approximately in the same price category in which Massimo Dutti and &Other Stories worked – a sub-brand of H&M, as well as the Russian brand 12 STOREEZ. For comparison: the average price in Love Republic is 3,400 rubles, Zarina is 1,900 rubles, be free is 1,500 rubles, Sela is 1,300 rubles. At the same time, the brand will have an almost maximum degree of “fashion” and, from this point of view, will compete with the departed Zara and H&M, as well as the Russian Lime.
Renders of the new brand are made in black and white. On one of them, a girl in a leather jacket, on the other, in an oversized bomber jacket and loose trousers. Judging by the draft sketches that Fontanka’s interlocutors got acquainted with, the emphasis is on the most natural, high-quality fabrics. The developers of the collection tried to take into account the trends, but for the tailoring of sweaters, coats, trousers, jeans and jackets, it is planned to use muted, calm tones – a dark blue and gray palette prevails. This approach makes the brand related to the Japanese Uniqlo.
Earlier, Igor Maltinsky, Development Director of the MFG, announced plans to launch 250 stores in 2023. According to Fontanka, at a presentation for shopping centers at the end of January 2023, the top manager confirmed the plans, and also announced his intention to launch Idol in September-October 2023. IFG increased its other formats by 3-4 times. For example, for Zarina, areas up to 1,000 sq. m. For be free – up to 2,000 sq. m. The company claims to be the anchor tenant of shopping malls and is ready to deal with several brands in the aggregate up to 5,000 sq. m. With such ambitions, the company is counting on attractive conditions from shopping centers (10-12% of turnover).
According to Fontanka’s interlocutors, Melon Fashion Group has indeed declared its readiness to occupy the space vacated after the withdrawal of foreign brands. But while waiting, “suddenly something better will be released”, and the shopping centers will become more accommodating.
Another factor of uncertainty is what will open in the place of the Inditex stores themselves. Earlier, the Russian business of the Spanish retailer was bought by the Lebanese group Daher. It was reported that those stores whose contracts were not terminated would start operating under a new name – presumably Maag. But what will be sold in them is still a mystery. According to a source in one of the St. Petersburg shopping centers, the deal with Daher is probably not closed yet, in any case, the Lebanese company does not talk about its readiness to restart the outlets. “But, apparently, there will be no more Zara Home and Massimo Dutti,” he notes.
At the end of 2022, Melon Fashion Group filed several more applications for the registration of new brands with Rospatent – some of them are new (Symbl, Symbl Premium, Above Body Cult), others are probably sub-brands of the main brands of Body Cult Love Republic, ZRN Man, be free Sport, be free Rock, be free YNG. The names suggest that ZRN will have a men’s collection, while be free will include teenage and sports lines.
However, development plans can still be revised due to the failed change of shareholders. In October, Sistema agreed to buy a 47.7% stake in Melon Fashion Group from Swedish Eastnine, East Capital Holding AB and a group of private investors. The amount of the transaction was to be 15.8 billion rubles. However, recently it became known that the agreement was terminated. Eastnine said it would look for another buyer.
Melon Fashion Group was founded in 2005 on the basis of the Pervomaiskaya Zarya factory in St. Petersburg. She owns and operates the brands Zarina, befree, Love Republic and Sela. The company operates in 181 cities in Russia, as well as in Kazakhstan, Armenia and Belarus. At the end of last year, she operated 845 stores. Melon Fashion Group’s revenue in 2022 reached 37.5 billion rubles, net profit amounted to 3.5 billion rubles.
