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Problematic "Magnet" by Sergei Galitsky. Ours in Forbes. Stars, millionaires and companies of the Krasnodar Territory Gordeychuk Magnet

Why Sergei Galitsky broke up with his trading offspring

The main shareholder of Russia's second largest retailer Magnit, Sergei Galitsky, decided to sell almost all of his stake to VTB. The agreement on the sale of 29.1% of Magnit was signed by the entrepreneur and the president - the board of directors of the state bank Andrey Kostin on February 16 at an investment forum in Sochi and immediately announced the deal in person. This event was not easy for Galician. He could not immediately speak, he asked for water, and his voice trembled more than once during a short speech.

The entrepreneur said that he headed the company for 25 years, but "something needs to be changed in his life." He called the decision to sell Magnit difficult, but, according to him, he and the shareholders have different views on the development of the company. A deal with VTB is the best solution, as the bank has big ambitions, Galitsky stressed. “Further Magnit will go without me,” the businessman concluded.

Galitsky will have 3% of the retailer. The transaction must be approved by the Federal Antimonopoly Service. The petition has not yet been received, a spokesman for the service said on Friday evening.

VTB will pay 138 billion rubles for the shares of Magnit. It turns out that the bank will get the papers at a 4% discount by the close of trading on the Moscow Exchange the day before - February 15th. According to Kostin, this is one of the largest M&A deals this year. The entire amount will be paid in cash on the day the deal is closed, Magnit said.

For investors, the news about the sale of Magnit was a shock. On Friday, the company's quotes fell by 10% on the London Stock Exchange and by 7.8% on the Moscow Stock Exchange.

Magnit, along with Sberbank, are the two most popular Russian securities, says Alexei Krivoshapko, director of Prosperity Capital Management. But from a corporate governance standpoint, the deal is "disgustingly structured," he said. As Krivoshapko argues, in fact, VTB acquires control, and the law requires, when buying more than 30% of the company's shares, to make an offer to buy back securities to minority shareholders. “They bought a little less on purpose so as not to do it. This is absolutely ugly and the worst behavior on the part of the state bank,” Krivoshapko said. “This suggests that he did not care about the market and minority shareholders, this is a spit in the face of all investors.”

Prosperity is a minority investor in Magnit, Krivoshapko explained to Vedomosti. “We have a very small share, but we have achieved equal treatment for all investors and in much smaller companies,” the investor added. So far, according to Krivoshapko, the fund is studying how to proceed in the future in connection with the deal between VTB and the retailer.

Another minority shareholder of Magnit, TKB Investment Partners, agrees with the position of Prosperity, says its managing director Vladimir Tsuprov.

Not the best buyer

The fact that VTB became the buyer is “a huge minus for some foreign investors,” Tsuprov believes. The State Bank may be able to restore the growth of the retailer's business, he argues. But a huge overhang could form on the stock market, he fears: “About 10-15% of Magnit’s capital could exit the asset.”

First Deputy President of VTB Yuri Solovyov does not believe that the deal will cause an outflow of foreign funds: "[For example] Sberbank, which is also under sanctions, has a huge number of foreign investors." But the motivation of Magnit's investors was completely different than, for example, the motivation of Sberbank investors, Tsuprov disagrees.

A large part of the value of Magnit for investors was based on a specific thing, the investor explains: they bought papers because they believed in Galitsky. “Now, instead of Galitsky, they are being offered the management of VTB, which, as a cherry on the cake, is under sanctions: both some managers and the bank itself.”

How "Magnet" was traded

For investors, Galitsky from Krasnodar was an example of the "Russian Sam Walton" - the founder of the world's largest retailer Wal-Mart. Galitsky's business began with the distribution of cosmetics and household chemicals in 1994, in the second half of the 1990s. he opened the first grocery stores. Unlike competitors, Magnit did not seek to immediately conquer Moscow and St. Petersburg, but went to small towns and regional centers, remaining profitable and paying dividends.

"Magnet" deliberately tried to avoid the two capitals, explained in the mid-2000s. Vedomosti is a person close to the company. Russian retail chains were just beginning to develop at that time. Meanwhile, household incomes and demand were growing, so the market was dominated by the expectation that large foreign chains were about to come to Russia. They would start their expansion precisely from Moscow, and then they would go like a skating rink across the rest of Russia, the source of Vedomosti said. Magnit, on the other hand, wanted to buy time and have time to seriously settle in the regions.

Sergey Galitsky departs from the management of Magnit without waiting for the sale of shares. Evgeny Razumny / Vedomosti

In addition, the emphasis on the provinces allowed Galician to remain in the shadows for a long time. In fact, until Magnit's IPO in 2006, only a few knew that it was the largest chain in the country in terms of the number of stores, second only to X5 Retail Group in terms of revenue. This greatly facilitated the task of finding space for new stores or, for example, communicating with the authorities, said the source of Vedomosti.

At the same time, unlike many entrepreneurs who have grown to the federal scale, Galitsky did not begin to transfer the headquarters of Magnit to Moscow, but left it in Krasnodar. Moscow is “a rather uncomfortable city for living,” and people living in the capital are “not very happy,” he said in an interview with RBC in 2011. And to the journalist’s statement that incomes are higher in Moscow, Galitsky replied that money cannot buy “lack of traffic jams” and “good climate”: “Moscow has [only] 80 sunny days a year.”

Despite the crisis of 2008, Magnit was actively developing and a few years later became the number one in Russia. First, in 2011, it overtook X5 Retail Group in terms of capitalization. In 2012, the competitor was doing very badly: frequent reshuffles of top management, slowdown in network growth and revenue. And in early 2013, Magnit finally overtook its main competitor in terms of turnover. “I'm afraid to seem immodest, but for the first time in 15 years, since the opening of the first store, we have become a sales leader,” Galitsky commented on this achievement in a company message.

Demand on the decline

But Magnit failed to hold the lead for a long time: X5 solved the problem with management, developed a clear strategy for Pyaterochka, updated stores and returned to growth, while Magnit, on the contrary, began to slow down.

At first, the retailer attributed the slowdown in revenue growth to a drop in the purchasing power of low-income Russians - its main audience - at the end of 2014. But the economy stabilized, and the X5, with the updated Pyaterochka, which consumers liked more than the seemingly less attractive Magnets, began to push the rival and in the regions. As a result, in 2017, X5 again became the leader in revenue, and on February 13, it also regained the title of the most expensive retailer in Russia by market capitalization. Magnit remained the leader only in terms of the number of stores.

Alarms

The first alarming signals in Magnit appeared back in 2014, then the indicators began to deteriorate, and there was no understanding that global changes were needed, and no readiness to carry them out in the company, recalls Mikhail Burmistrov, CEO of Infoline Analytics. Apparently, he argues, Galitsky was not ready to admit this, so at first the company took the position that changes were not needed, then that one could get by with point changes that turned out to be cosmetic.

For example, says Burmistrov, at the same time, large investments were made in updating stores and staff were reduced. The terms for the reconstruction of stores were too long and were not accompanied by a change in the assortment, the expert lists. “If X5 first worked out the pace and speed of the Pyaterochka reconstruction, and then launched a massive quick update, then Magnit began a massive update before it learned how to do it quickly,” he says.

In the past, Magnit owed much of its success to targeted improvements in efficiency in the supply chain, recalls Burmistrov. “But a model that wasn't focused on customer needs and a unique value proposition was no longer competitive, and Galitsky probably wasn't ready to admit it,” he says. In fact, both Galitsky and Magnit turned out to be hostages of many years of success, Burmistrov sums up.

partner factor

The fact that the retailer's management has not been able to take comprehensive measures to resume business growth is associated by many experts interviewed by Vedomosti with the events of two years ago.

Galitsky was a co-founder of Magnit along with a partner, Vladimir Gordeychuk. Galitsky once said that his sphere is a common vision, and operational leadership is on Gordeychuk. In early 2016, Gordeychuk resigned ahead of schedule from the position of general director of the retailer's operating company, Tander JSC. Then two sources of Vedomosti explained that the top manager decided to retire.

The story developed for a long time, says Tsuprov: “The departure of the partner, Gordeychuk, the shuffling of top management, the appointment of distant relatives to senior positions. But no one expected her to come to such a conclusion now.” The management of Magnit, weakened by the departure of Gordeychuk, fearing to lose his job, for a long time tried to create the illusion with the founder of the network that everything is actually fine, Burmistrov believes.

Galitsky did not cope with the operational management, two Vedomosti interlocutors among the partners of Magnit say: he could not build a top management team and also could not go to attract a strong leader from the outside. Galitsky had to either continue to fight and make radical changes himself or give up control, but he was already tired, Burmistrov argues.

“He [Galitsky] is very impulsive, investors told him about the necessary changes, he did not listen,” said one of the partners of Magnit. It seems that at some point he just freaked out and sold it, the source of Vedomosti argues.

Sold by myself

The entrepreneur himself became the initiator of the deal with VTB, says a representative of the bank. “During one of the conversations, Sergei Nikolaevich [Galitsky] expressed the wish that, probably, it was time for him to sell the company, that he wanted to concentrate, as he said, on the problems of children's football,” Kostin told Kommersant FM. “If the investor is very dissatisfied, I have to leave,” Galitsky said in a short speech to employees of the headquarters of Magnit on Friday afternoon. Although a little earlier, he noted that "the market is now dishonestly evaluating us." And he explained: Magnit has the best EBITDA and high profits.

Galitsky will leave the post of General Director of Magnit and other positions in the company: the Board of Directors approved a new head, he will be the current CFO of the retailer Khachatur Pombukhchan. According to a source close to Magnit, the new shareholder will not nominate Galitsky as an independent director on the board: "He [Galitsky] himself is against it."

Investors do not necessarily need the help of the founder of the company for its further management, notes Stanislav Kiselev, senior partner of Egon Zehnder. During due diligence, which can take anywhere from weeks to months, an investor has the opportunity to delve into the details of the business and resolve many contentious issues, he says.

Why VTB stores

VTB itself came out with a deal proposal, a person close to one of its parties assures. VTB is well acquainted with the Magnit business. Alexei Makhnev from VTB Capital was on the board of directors as an independent director for several years. And Galitsky himself has been a member of the VTB Supervisory Board since 2015. According to one of the partners of Magnit, Kostin and Galitsky have known each other for many years.

The choice of VTB as a buyer is not a big surprise: the bank is one of the few who could afford a deal of this size, besides, VTB often advised Magnit and Galitsky himself, for example, in share transactions, comments Natalya Kolupaeva, senior analyst at Raiffeisenbank . Galitsky did not discuss the possibility of a deal with Sberbank, said a person close to the state bank. A spokesman for Sberbank declined to comment.

The investment in Magnit is non-core for VTB Group, but it is an affordable asset that makes a profit and pays off well, says Yury Belikov, chief methodologist of Expert RA: the retailer’s capital is small in relation to VTB’s capital, and the purchase of a stake in it does not create a regulatory risk for the state bank.

The market has big questions about how effectively VTB will manage the retailer, says Sergey Suverov, an analyst at BK Savings. For the bank, this purchase seems interesting - Magnit's business is quite profitable and liquid, he continues: “There is also a certain synergy between the retailer and the state bank: Magnit's infrastructure can be used to sell banking products, and Russian Post can be involved in the process logistics improvements. However, the state bank will have to divert significant resources to the development of a non-core asset.”

These are the ambitions of VTB, the head of the bank active in the M&A market is sure: Magnit is a big company, you can try to develop it further, but you can also resell it at a higher price some time later.” “The company is very promising, but over the past year it has lost a lot in capitalization. We believe that it is possible to return the value of shares to a higher level. We also do not exclude the possibility of a merger, expansion and organic growth of the company are possible. We will watch, ”Kostin told TASS. The question remains whether VTB will be the final buyer, Konstantin Belov, an analyst at Uralsib, argues, or whether this stake will be resold to a new buyer.

VTB is a strategic investor, says a bank representative. According to him, in this capacity, his main task is to increase the fundamental value of Magnit's business, and this should provide an attractive return on invested capital for both current shareholders and potential new investors. To implement this task, VTB plans to attract international and local strategic partners, said a VTB representative.

What to do VTB

“In Magnit, it is necessary to transfer a certain reorientation from an entrepreneurial approach to a more modern, clearly motivated management team, to slightly change the organizational structure. We will strengthen the management pointwise,” Solovyov said.

Apparently, the retailer needs changes in strategic management and, probably, VTB expects to be able to find ways to develop this asset, Olga Naydenova, an analyst at BCS, said. Perhaps there will be an attempt to do something more on the basis of the existing Magnit in order to resell it at a profit in the future, says Fitch analyst Alexander Danilov, but whether it will work or not is a big question. After all, the market is very competitive. The State Bank has bought non-banking assets before. But VTB ended up pulling out of many investments. VTB may have difficulty selling the asset in a few years, Suverov believes. Foreigners may not be interested in the asset due to potential political risks, and it will not be easy to find investors on the Russian market, he believes. Although industrial and financial groups, such as Alfa Group, may be interested in the retailer. Most likely, VTB will want to sell its market share, he is sure. Talk of selling the stake is premature, a VTB spokesman said.

First of all, Magnit needs to decide how to develop further: will it be the growth of stores and buying up other players, or will growth be slower, with an eye to the profitability of sales now, Tsuprov comments. Also, Magnit needs to set very specific goals and go towards them, he continues: for example, X5's goal is to take a certain market share and increase the number of stores.

Natalia Ishchenko, Anastasia Ivanova, Daria Borisyak

Gordeychuk Vladimir Evgenyevich (born August 15, 1961, Krasnodar, RSFSR, USSR) is a Russian entrepreneur, one of the founders, partner. Member of the Board of Directors of PJSC "Magnit".

In 1988 he graduated from the Novorossiysk Higher Marine Engineering College with a degree in navigation.

A very unremarkable figure. According to media reports, he was a long-distance navigator, and in 1996 he joined the distribution company of Sergei Galitsky as a simple driver. He knew English and translated the inscriptions on bottles of household chemicals and cosmetics, which the company then traded. Later, Galitsky said in an interview that his area of responsibility is a common vision, and operational management is on his partner, Gordeychuk.

Prior to Magnit's IPO in 2006, Gordeychuk had a 5.5% stake in the company. At the end of September 2016, he owned 2.3% of shares, in November 2016 it became known that Gordeychuk had sold half of his stake - just over 1% - for 11.4 billion rubles. At the beginning of 2016, Gordeychuk left ahead of schedule the position of CEO of the retailer's operating company, JSC Tander, but remained a member of the board of directors of Magnit. Then two sources of Vedomosti explained that the top manager decided to retire.

From June 2006 to January 2016, he served as General Director of JSC Tander, from April 2006 to January 2016, Deputy General Director of PJSC Magnit. Since 2016, he has been a member of the Board of Directors of the company.

Since 2014, he has been a member of the Forbes magazine's "200 richest businessmen of Russia" rating. In 2014, he took 128th place in this rating with a capital of $800 million, in 2015 he dropped to 141st place ($600 million), in 2016 - to 188th place ($400 million). In 2017, he was not included in the Russian Forbes list.

Married, has two children.

Born in 1961.

Education

He graduated from the Novorossiysk Marine Engineering School with a degree in navigation.

Activity

Gordeychuk served as a long-distance navigator, and in 1996 he joined Galitsky's distribution company as a simple driver.

He knew English and translated the inscriptions on foreign perfumes for saleswomen.

"Themes"

"News"

Partner of the founder of Magnit Vladimir Gordeychuk sold half of his shares

Vladimir Gordeychuk, a minority shareholder in Russia's largest retail chain Magnit, has sold about half of his stake, International Financing Review (IFR; part of Thomson Reuters) reported. The price range was 9500–9600 rubles. per share of Magnit, according to IFR, the deal was closed on November 4 at the lower limit, the seller attracted 11.4 billion rubles. At the close of trading on the Moscow Exchange, a share of Magnit was worth 10,360 rubles, so the discount was 8.3%.

The collection of applications was carried out in an accelerated mode in one day, when Russia celebrated the national holiday Day of National Unity, which was declared a day off. UBS acted as bookrunner, writes Bloomberg. According to Magnit, at the end of September 2016, Gordeychuk owned 2.3% of Magnit; over the past years, he has gradually reduced his stake in the company: before the IPO in 2006, Gordeychuk had 5.5% of Magnit.

Russian indices traded in different directions amid weakening ruble

Last Friday, when shares were not traded on Russian sites due to a holiday, Magnit's minority shareholder Vladimir Gordeychuk sold more than 1% of the retail chain's shares.

According to the media, the price range was 9500-9600 rubles per share. The lower limit of the range turned out to be 8.3% lower than the closing price of trading on Thursday (10,360 rubles).

Quotes of Magnit fell by 5%

Shares of Magnit fell more than 5% during trading on Monday due to news about the sale of about half of its stake by the company's minority shareholder Vladimir Gordeychuk.

Quotes of "Magnet" by 11.16 Moscow time fell by 5.6% to 9870 rubles.

According to the International Financing Review (IFR; part of Thomson Reuters), Gordeychuk sold about half of his stake. The price range was 9500–9600 rubles. per share of Magnit, according to IFR, the deal was closed on November 4 at the lower limit, the seller attracted 11.4 billion rubles. At the close of trading on the Moscow Exchange, the share of Magnit was worth 10,360 rubles, thus, the discount was 8.3%.

"Magnet" did not fulfill the sales plan due to the last two weeks of 2015

Child permutations

Since January 11, the powers of the general director of the operating subsidiary of Magnit, the company Tander, Vladimir Gordeychuk, have been prematurely terminated, according to a report by Magnit. Instead, Alexander Barsukov, who is a member of the board of Magnit, has been appointed the general director of Tander. Gordeychuk has been in charge of Thunder since 2007, according to SPARK-Interfax.

The Investigative Committee opened a case against the retail network "Magnit"

The Investigative Department of the Investigative Committee of the Russian Federation for the Saratov Region opened a criminal case, suspecting Tander CJSC (the operating company of the Magnit retail chain) of discrimination against employees of the distribution center (DC) in the city of Engels “on the grounds of belonging to public associations,” the local department of the Investigative Committee said Russia.

"Magnet" for investors

“Krasnodar Tander, the discounter operator Magnit, before issuing bonds, disclosed data on the structure of shareholders and the profitability of the business. The founder of Magnit, Sergey Galitsky, controls 67% of the chain, which is contesting the leadership of the food market leader, Pyaterochka. Large stakes belong to Galitsky's partners - Moscow banker Alexei Bogachev (20%) and the second person in the company Vladimir Gordeychuk (5.5%).

Magnit attracted investors

Magnit, the second largest grocery retailer in Russia, managed to sell its depositary receipts (one share corresponds to five GDRs) on exchanges for $13, which is almost at the upper limit of the established price range of $12-13.5 per GDR. The company itself sold approximately 5.6 million shares of the additional issue, or approximately 6% of the increased authorized capital, for $365 million. Its three founders, Sergei Galitsky, Vladimir Gordeychuk and Alexei Bogachev, raised another $158 million by selling personal shares - about 2.7% of the increased authorized capital. They will invest the proceeds in construction, factoring and production of products.

Magnit sold shares for almost half a billion dollars

This autumn, Magnit increased its authorized capital by 10.8 million shares (before that, its size was almost 89 million securities). In early December, the company sold 4.1 million shares on MICEX and RTS at $85 per share, receiving $350 million. million securities also at $85. Major shareholders, including Sergei Galitsky and Vladimir Gordeychuk, did not take part in the buyout of the additional issue.

Magnit intends to raise about $350 mln in SPO

The company expects to raise about $350 million, Magnit said in a statement. The retailer's main shareholders, including Sergey Galitsky and Vladimir Gordeychuk, will not take part in the share buyback.

Magnit will hold SPO before the end of the year

The main shareholders of Magnit, including businessmen Sergey Galitsky and Vladimir Gordeychuk, do not plan to take part in the buyout. The company is going to use the proceeds to expand its retail network and develop logistics. Capital expenditures next year are planned at up to $1.4 billion.

Magnit raised $475 million from an additional share issue

The company's shareholders acquired 1.47 million ordinary shares, or 13.6% of the additional issue for a total of $124.8 million, by preemptive right. The retailer's largest shareholders, Sergei Galitsky, Vladimir Gordeychuk and some others, did not use their pre-emptive right.

Magnit increased its capital by $475 million from the placement of its shares

Earlier in Magnit's reports, it was noted that the main shareholders, including Sergey Galitsky, Vladimir Gordeychuk and some others, did not submit applications for the acquisition of shares as part of their exercise of their pre-emptive right.

Sell "Magnet"

The closing of the transaction is scheduled for October 29, and a road show began at the end of last week. The company will issue up to 11.2 million securities, taking into account the packages that existing shareholders can purchase under the pre-emptive right. However, three of the major owners - Sergei Galitsky, Alexei Bogachev and Vladimir Gordeychuk - do not intend to keep their shares, but on the contrary, they will sell part of the existing securities. They can raise $160 million, and the company itself - $365 million.

Retailer Magnit placed 52% of the additional issue of shares and raised $475 million

As the company reported, the largest shareholders of the retailer - Sergey Galitsky, Vladimir Gordeychuk and some others - said they would not use the right of first refusal.

The main owner of the Magnit network, Sergey Galitsky, again reduced his stake in the company to 37%

The retailer has announced its intention to make an offer of additionally issued ordinary shares in the form of global depositary receipts (GDRs), where five GDRs represent one share. In addition, the company's shareholders - Labini Investments Limited, Lavreno Limited and Vladimir Gordeychuk - intend to offer a portion of their existing ordinary shares in the form of GDRs and ordinary shares.

‘Magnit’ missed $155 million

Another $156 million during the SPO was raised by the founders of Magnit Sergey Galitsky (through Laverno), Alexei Bogachev (through Labini) and Vladimir Gordeychuk. None of them subscribed to the papers of the new issue, a source close to the retailer's shareholders said earlier.

"Magnit" is placed on a wave of optimism

The retail chain "Magnit" previously belonged to the Krasnodar CJSC "Tander". In January 2006, the company was re-registered as OAO Magnit to enter the stock exchange. The shareholders of Magnit are Sergey Galitsky (66.45%), the Cypriot offshore Labini Investment Ltd (22.49%, the nominal holder of the stake is Sistema Bank), network director Vladimir Gordeychuk (5.5%), financial director Alexander Prisyazhnyuk (1%) and commercial director Nikolay Panuli (1%). At the end of 2005, the Magnit network included 1,500 stores in more than 400 cities; in the first quarter of 2006, 74 more stores were opened. The company's revenue in 2005 was $1.578 million, EBITDA was $78 million.

Magnit will spend $250 million on development

During Magnit's SPO, international institutional investors signed up for 5.68 million shares of the additional issue in the form of GDRs for $369.2 million. Applications for another 2.42 million shares of the new issue were submitted by existing shareholders with a pre-emptive right to buy. Another 2.4 million shares were sold for $156 million by the founders of the company Sergey Galitsky (through Lavreno), Alexei Bogachev (through Labini) and Vladimir Gordeychuk.

"Magnet" provided its "daughter" with a loan of 3 billion

OJSC "Magnit" is the main owner of the companies included in the holding of the same name. At the end of Q1 2007, the main shareholders were: CEO Sergey Galitsky (51%), nominee holders LLC CB Sistema (0.21%), CJSC CB Citibank (0.06%). Management is also a shareholder, including members of the Board of Directors Andrey Arutyunyan (0.26%), Vladimir Gordeychuk (4.33%), Alexander Prisyazhnyuk (0.75%), Dmitry Chenikov (0.35%) and member of the Audit Commission Valery Butenko (0.3%).

» Vladimir Gordeychuk has sold about half of his stake, according to International Financing Review (IFR; part of Thomson Reuters). The price range was 9500–9600 rubles. per share of Magnit, according to IFR, the deal was closed on November 4 at the lower limit, the seller attracted 11.4 billion rubles. At the close of trading on the Moscow Exchange, a share of Magnit was worth 10,360 rubles, so the discount was 8.3%.

Gordeychuk, who graduated from the Novorossiysk Marine Engineering School in 1988 with a degree in navigation, began working with Galitsky back in the mid-1990s, when he got a job as a driver in his distribution company. Prior to that, he worked as a long-distance navigator, Kommersant wrote in 2006. Later, Galitsky said in an interview that his area of responsibility was a common vision, and operational leadership was on his partner, Gordeychuk.

Sales plan

The main owner of Magnit, Sergei Galitsky, plans to annually sell 1-1.5% of the company's stake to the market in the next few years. The entrepreneur spoke about this at the beginning of 2016 at meetings with analysts and investors in London and New York. Galitsky needs funds to finance personal projects. At the beginning of 2016, Galitsky directly owned 38.7% of the shares of Magnit, and by the end of September - 35.1%, according to the company

At the beginning of 2016, Gordeychuk left ahead of schedule the position of CEO of the retailer's operating company, JSC Tander, but remained a member of the Board of Directors of Magnit. Then two sources of Vedomosti explained that the top manager decided to retire.

The role of Gordeychuk in the management of Magnit has decreased, he devotes much less time to it, recalls Mikhail Burmistrov, CEO of Infoline Analytics. In addition, Galitsky is constantly also gradually reducing his share in the company (see cut) and this is an event absolutely expected by the market, the expert adds. As a rule, the sale of a block of shares by one of the main shareholders or top managers is a negative signal for the market, says Natalya Kolupaeva, senior analyst at Raiffeisenbank. But if a shareholder sells securities for personal reasons, this will not affect the retailer's quotes in the long term, Kolupaeva notes: most likely, in the case of the sale of part of Gordeychuk's stake, this is exactly what this is about. “The example of Galitsky, gradually reducing the share of ownership, is well known to investors. I think they will perceive the sale of part of the stake by Gordeychuk in a similar way, ”Kolupaeva believes.

There is logic in the sale of Magnit's securities now, Burmistrov believes. The situation in the Russian economy does not look very rosy even in the long term, the growth of the food market has noticeably slowed down, he argues: – by 4-5%. Almost no one in retail will be able to grow as fast as in previous years, even with a relatively stable ruble exchange rate, Burmistrov points out, and investors in emerging markets evaluate growth rates first of all. For reasons beyond Magnit's control, its dollar market capitalization will remain at its current level, and most likely it will even decline, says Burmistrov: investors' assessment of the Russian market will be revised.

In huge hypermarkets or smaller supermarkets with a red sign at the entrance "Magnet" you can go shopping in literally any region of Russia. Previously, this trade brand of a large retailer was known only to residents of the Krasnodar Territory and vacationers who came to the Black Sea resorts from all over the country. For the brand, soon the borders of one, albeit a large region, became cramped, and he spread his network far from Krasnodar and Sochi. "Magnet" today is one of the rare cases in domestic business, when a Russian citizen founded a trading network. For many years, the network has withstood fierce competition with other network hypermarkets, whose real owners are located abroad and have long gotten their hands on trade in discounters.

Actually, "Magnet" is just a sign. The real name of the company is Tander, and the real name of its founder is Harutyunyan. The businessman decided to change the entry in his passport, taking advantage of the opportunity. He took his wife's surname when registering the marriage at the registry office. Perhaps the not-quite-usual rebranding of the surname benefited the cause. Sergei Arutyunyan-Galitsky was born in 1967 in the resort suburb of Greater Sochi, the village of Lazarevskoye. He first started doing business in the regional capital of Krasnodar, where he studied at the university. What you can’t take away from Armenians is business acumen and the ability to “turn on your head” when developing a business.

While still a student, Sergei worked part-time in several commercial banks, and then decided to try his hand at trading. He and his friends founded the distribution company TransAsia, which distributed the products of major manufacturers of cosmetics and hygiene products Avon, Johnson & Johnson, Procter & Gamble. A year later, he got the idea to take up a form of trade organization that was promising for Russia, as it then seemed to him. It was 1995. Shops, street markets, small otdelchiki in the entrances of residential buildings flourished in retail trade, but Galitsky felt that their time was irrevocably running out. The civilized development of the market will inevitably absorb them or ruin them.

In 1995, he single-handedly founded the Tander company, and after another 5 years, having saved up money, he began to implement a global project, which eventually brought him fame and not a small fortune. The key concept for Galitsky was the word "discounter", unknown in Russia at that time. The Magnit chain of stores clearly showed the Russians what it really is.

Network Magnet

Galitsky carried out transformations at a truly revolutionary pace. In 2001, its network already included 250 stores. In 2006, the main beneficiary of the Tander company placed the company's shares on 2 Russian stock exchanges RTS and MICEX at once. For a 19% stake in the business, he received $ 368 million. Until now, Galitsky is considered the main owner of the Magnit network. He has 41% of the shares, that is, more than a controlling stake. Of these, he owns 5.33% through the offshore company Lavreno Ltd.

The co-owners of Magnit also included Vladimir Gordeychuk with a modest 2.92% and Alexei Bogachev with 2.6% on the account of his offshore Labini Investments Ltd. The remaining 47.37% of the shares are in free circulation, constantly flowing from hand to hand. In 2016, the omniscient Forbes estimated the fortune of Sergei Galitsky at $ 5.7 billion. However, two years before that, the amount of capital indicated on the list of billionaires was much more significant ─ $ 10.3 billion.

Recent years for the network "Magnit" and its owner can not be called successful. The second half of 2017 was especially terrible. As soon as the company "Thunder" announced the deplorable results of work in the third quarter, as the collapse of the company's quotations on the stock exchange occurred. For one "black" day on October 20, 2017, the share price fell by 12%. For Sergei Galitsky, this meant that in a few hours he became poorer by $ 606 million.

Of course, you can blame your many competitors for everything that happened, the first rows of which are headed by the X5 Retail Group and the OKEY supermarket chain. There was something similar in the recent history of Magnit. Ten years ago, "Magnet" in 2007 gave a profit of 53% less than in the previous period. Then everything was clear. The company, for a number of reasons, was forced to temporarily increase the cost of administrative staff. This was not the case in 2017. Gloomy clouds began to hang over all the "Magnets" long before the "black" day.

Since 2008, the owner of the trading network has been forced to devote less time to his offspring. New concerns have been added. In obedience to the fashion that suddenly swept over all Russian oligarchs, he acquired his own football club. They became the Krasnodar "Kuban", whose president is Sergei Galitsky. In 2011, Kuban, to the delight of local fans, entered the Premier League. Worries from a sports victory only added. In parallel, I had to deal with the expensive construction of a new stadium for the football team.

The network continued to expand across the country, but over and over again found itself at the center of minor scandals that cast a shadow over it and began to form a negative consumer opinion about it. In 2012, in the city of Engels, Saratov Region, the administration of the regional distribution center "Tandera" closed the trade union organization and fired the entire management of the trade union committee. The prosecutor's office and the court were forced to intervene in establishing justice. The administration of the organization was charged with a rare in Russia article of the Criminal Code "On discrimination of citizens depending on belonging to a public association." The noise was all over the country. Galitsky, instead of intervening and stopping lawlessness in the bud with his power, reacted very nervously not only to criticism in the press, but also to any further mention of those events.

In 2015, a grandmother died of a heart attack in the Kronstadt Magnit, suspected by store guards of stealing several packs of butter. "Magnet" and its owner were rinsed for a long time on all television screens. In the Sverdlovsk region, local authorities were forced to ban the sale of alcohol in all stores of the chain for a short time. The local management of Tander did not bother to renew the license to trade in this product in time. Officials, however, themselves were frightened by the ban they had announced and literally a day later canceled the previous restriction.

Blockade survivor Rauza Galimova at the supermarket checkout on the day of her death

In the Arkhangelsk region, where in recent years “Magnit” has flooded all major cities, it took a long time and painfully to evict a store from a residential “Khrushchev”, not adapted for the functioning of a trading enterprise, and accused the company of forgery ─ under the guise of butter, customers were sold a spread. Across the country, cases of widespread overpricing and serious deviations from technical regulations and norms have become a system.

Tightening for staff

Sergei Galitsky reacted to unfavorable changes in performance in a peculiar way, borrowed from the times of wild capitalism. He tightened the exploitation of store personnel. Many employees of Magnit say that they are in the position of slaves without rights. This explains the persecution of the representative body of the labor collective in Engels. The attitude of managers towards sellers can be defined by the expression "there are many slaves in Russia, others will come instead of you."

Giant overtime work, work on weekends and holidays added to the requirement to meekly participate in the "folding" of expired or spoiled goods. Galitsky was the first in Russia to think over a new move that would further enslave the workers of a trading enterprise. He set out to become the owner of a pension fund, into which all workers can be driven by order and manipulated with their pension savings. Given the goal, the name of the fund sounded very mockingly ─ Virtue Christian Pension Fund.

The most important exploiter ─ the owner of Tander, Sergey Galitsky, turned out to be not so strict and principled towards the people who placed his photo on the election poster of United Russia in 2011. The businessman immediately disowned his not very convenient party affiliation. The inconvenience lay in the fact that for the first time since the parliamentary elections, a wave of indignation swept through Russia over the rigging of their results in favor of the ruling party. Party image makers used the photogenicity of the owner of Magnit. Galitsky's partner on the banners was the ex-governor of the region Nikolai Kondratenko, known to the population as "father Kondrat", who was remembered for his negative attitude towards any "foreigners".

Galitsky did not give consent to the use of his photo, however, he did not demand financial compensation in court. Experts unanimously predict difficult times for Magnit. The discounter network consistently demonstrates low adaptability to changing macroeconomic realities. Sergei Galitsky in November last year, trying to change the vector of the company's movement, lent it 44 billion rubles from his personal wallet. He is confident in his abilities and is not going to sell his offspring yet.