Douglas Holding, in yesterday’s release, reported the sale of their Russian business. The perfume/cosmetics chain Douglas Rivoli was obtained by a competitor, the Rive Gauche chain, which in 2008 belonged to the businessman Oleg Boyko. The sum of the agreement is assessed by experts to be around 55-75 million Euro. In addition to the 32 Douglas Rivoli stores, Mr. Boyko also received rights to use the brand for the next three years. As a result of the deal, Rive Gauche becomes the second-largest perfume-cosmetics chain in Russia.

The fact of the purchase of the Russian Douglas Rivili stores, with an annual turnaround of 55 million euro, by Rustiset Holdings Limited, the stakeholder in the Rive Gauche perfume-cosmetics chain, was stated in Douglas Holding AG’s annual financial report. It is reported that the deal was closed on December 30, 2010. Rustiset Holdings is in turn owned by Oleg Boyko, Larisa Karaban and Pavel Karaban.

“This deal follows the strategic development course of our company in becoming Russia’s largest perfume-cosmetics chain,” Oleg Boyko told RBC Daily through his press service. “Douglas Rivoli has very successful indicators; the chain is developing well in its segment.” The company will use both brands, Rive Gauche and Douglas Rivoli, clarified Mr. Boyko. As explained on Douglas Rivoli’s website, by the conditions of the licensing agreement, the buyer has the rights to use the Douglas Rivoli brand for three years.

The main reason for the sale of the Russian chain was the significant volume of investment necessary to achieve a leading market position, the German holding reported. The high rents in large Russian cities were cited as another factor complicating business development.

In the estimates of Alexander Loginov, the General Director of the Arbor Mundi chain, the value of the deal could be between 55-77 million euro. Earlier, the value of the Russian Douglas Rivoli business was around 60 million euro.

In essence, Rive Gauche acquired Douglas Rivoli’s brand and accumulated customer base, which is one of the oldest Russian perfume-cosmetics chains, commented Anna Dysheva-Smirnova, Director of Business Development for «Reed Elsevier». “‘Douglas’ always carried an aura of refinement and high pricing policy; the chain practically never leveraged the mass market,” she adds, “and their points of sales were located where buyers of high-price category products were concentrated.”

In Ms. Dysheva-Smirnova’s opinion, “it would be reasonable for Rive Gauche to keep Douglas Rivoli’s format in Russia: in Russia there are not many deluxe, exclusive retail points.” Alexander Loginov agrees: “Rive Gauche, developing only in the affordable-goods segment, has entered the premium-class segment, which only strengthens their position. In this way, the market sees the emergence of another large player, after L’Etoile,” the expert summarizes.

By the assessments of Discovery Research Group, the absolute leader among perfume-cosmetics chains, according to data gather in the first half of 2010, is L’Etoile with 33% of the market, Rive Gauche’s share made up 22%, Ile de Beaute — 21%, and Douglas Rivoli –5%.