The Mullier family’s Adeo group, which manages the Leroy Merlin network, plans to transfer control of the Russian business to local management. The deal should not lead to changes in the operation of the division of more than 100 hypermarkets and may relieve some of the pressure on the Mullier family in connection with work in Russia. Experts admit that if further separation is necessary, a brand change may be required.
The French group Adeo, which owns a chain of Leroy Merlin home improvement and home goods stores, plans to transfer control of its business in Russia to local management. Adeo announced this on March 24. The deal will allow the division to continue operating while maintaining jobs for 45,000 people, the report said.
Adeo added that preparations for the deal began several months ago and followed the suspension of investment in the Russian business, which gradually began to operate independently. The transfer of control over Leroy Merlin stores still needs to be approved by Russian regulators.
A representative of Leroy Merlin in Russia told Kommersant that no changes in the operation of the network are planned so far, since Adeo has only announced its intention to transfer control to the local board of directors.
Leroy Merlin has been working in Russia since 2004. According to its own data, today the network includes more than 100 hypermarkets in more than 60 cities of the country. According to Infoline, Leroy Merlin ranks first in sales in the DIY market in Russia, having increased revenue in 2022 by 15.6%, to 529.7 billion rubles. without VAT year on year.
Mikhail Burmistrov, CEO of Infoline-Analytics, says that the transfer of control over the Russian Leroy Merlin to local management is a logical step in the face of strong pressure that is being exerted on the brand owner abroad due to work in Russia.
According to Mr. Burmistrov, Leroy Merlin is very noticeable as the leader of the Russian DIY market and, perhaps, the isolation of the local business will relieve some of the pressure on the head office.
At the same time, the expert does not exclude that the next step may be a brand change. According to Mr. Burmistrov, there is no need to wait for changes in the work of Leroy Merlin, since the network in the Russian Federation has actually been independent for many months.
Adeo is owned by Association Familiale Mulliez, the Mulliez family’s holding company, which also owns Decathlon sporting goods chain and Auchan grocery chain. Decathlon in March 2022 announced the suspension of work in Russia. In January 2023, RBC reported that the network’s assets were put up for sale. The Russian Auchan reported that they continued to work in Russia. In March of this year, the chain also announced the opening of a My Auchan store of its own brands in New Moscow.
According to Mikhail Burmistrov, Auchan occupies 1.2% of the Russian food retail market against Leroy Merlin’s 29.7% share in the DIY market, and the pressure on Auchan due to work in Russia is lower. In addition, Auchan and Metro have been working in Crimea for a long time, where the largest Russian grocery chains still do not enter, he recalls.