MOSCOW (Reuters) – Although too chilly for a theme park, Russia’s underserved toy market makes it a sexy enterprise prospect for Walt Disney Co (DIS.N), the top of its Russian operations mentioned on Friday.
Opening the U.S. group’s first toy retailer within the nation, Marina Zhigalova-Ozkan mentioned it deliberate a minimum of 5 extra, and was working with native producers to maintain costs aggressive.
“We predict that in Russia there aren’t too many toy retailers … and we thought it could be fascinating and complementary to what already exists available in the market to open our personal branded shops along with companions,” she mentioned in an interview.
The brand new outlet occupies round 300 sq. meters within the central Moscow kids’s division retailer, alongside British toy retailer Hamleys, which opened two years in the past. Three extra Disney shops are deliberate for Moscow, one in St Petersburg and one in Russia’s south this and subsequent 12 months, Zhigalova-Ozkan mentioned.
Disney has teamed up with Russian firm Ideas4Retail, which can run the shops and pay a royalty payment to Disney, with the 2 working collectively on product vary and pricing.
Ideas4Retail additionally works with Hamleys in addition to children-focused manufacturers Imaginarium and Mamas & Papas in Russia.
In contrast to Disney shops elsewhere, which additionally promote clothes and decor, retailers in Russia will solely promote toys and can symbolize the Disney, Star Wars, and Marvel franchises.
Disney’s present Russian enterprise focuses on distributing and producing cartoons and films, and licensing its manufacturers to be used on a variety of client items and in digital content material.
It additionally has a three way partnership with Russian firm UTH, which owns Disney Channel within the nation.
Merchandise for the shops might be provided by native producers with licensing agreements with Disney, whereas some might be imported from different nations. Disney has round 300 licensees in Russia, of which 136 manufacture items in Russia.
Zhigalova-Ozkan mentioned the corporate had been specializing in localizing manufacturing in recent times, and had stepped this up after the rouble fell sharply on the finish of 2014.
“Due to the (trade) charge variations lots of the merchandise that we had been bringing in grew to become out of attain for the Russian client,” she mentioned.
“Now we have expanded the variety of items we promote at mid costs. We notice that the common spent could also be decrease however demand for kids’s items doesn’t decline. Kids need toys anyway.”
Nonetheless, Disney has no plans for a theme park in Russia.
“Sadly, it’s chilly in Russia. A theme park ought to work 12 months in a 12 months. And when it comes to variety of individuals in Russia sadly it’s not very environment friendly,” Zhigalova-Ozkan mentioned.
Disney doesn’t break down its enterprise figures by nations.
Reporting by Maria Kiselyova and Olga Sichkar; Enhancing by Mark Potter
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