The Moscow Times April 17, 02

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IKEA Promises 2 Kilometers of Shopping

By Alla Startseva

The nation's largest mall with its largest movie theater and more than two kilometers of shops will open in December, Swedish retail giant IKEA announced Tuesday. The $200 million MEGA mall will stretch more than 53 hectares, with 150,000 square meters of retail space and a record 10,000 parking places. Besides project leader IKEA, anchor tenants include French retail giant Auchan, Russian retailers Tekhnosila and Sportmaster, a do-it-yourself store and the cinema, which will have 11 screens and more than 3,000 seats.

"This is a milestone in the transition of Russia's retail market toward international standards in scale and quality," Peter Odlund, MEGA's project development manager, said at a news conference Tuesday. "Russia's retail sector will never be the same."

MEGA is located on the intersection of Kaluzhskoye Shosse and the Moscow Ring Road, or MKAD. The project began in December, when IKEA opened its second Moscow outlet on the site. It will open this Dec. 12.

"For IKEA it is a unique business project, bigger than anything we did before," said Anders Binnmyr, deputy general director of IKEA-Russia. "MEGA is a vivid demonstration of our firm belief in, and commitment to, the Russian market." The mall is divided into five sections, including home improvement, sport and leisure and a classy 5th Avenue-style district.

"In the first phase, sales from all the shops in the mall will total $670 million per year," Odlund said. The number of visitors will range from 40,000 on weekdays to 85,000 on weekends to 170,000 on holidays, he said. Auchan's 16,000-square-meter space will hold a hypermarket offering 40,000 items, and the retailer will manage another 40 other stores on 880 square meters.

Auchan's outlet will be its third -- and largest -- in Moscow, with the other two stores to open in Mytishi in the northeast and Marfino in the west. Appliance retailer Tekhnosila, which already has more than 20 outlets around Moscow, will open its first large supermarket inside MEGA, measuring 5,000 square meters. "How many gray hairs it cost us to get a contract, being a Russian retailer," Tekhnosila general director Sergei Lipsky said, adding that the company reduced its activity last year to concentrate on the MEGA project.

Other tenants include TATI, Ives Rocher, Petek 1885, Rivoli, Mango, Tommy Hilfiger, Reebok, Colin's, Ruby Tuesday, Wolford and T'Store. MEGA will ultimately hold more than 250 stores. Ninety-five percent of the retail space has been leased, Odlund said. Besides stores, MEGA will have 3,000 restaurant seats with a wide variety of cuisine, including U.S. fast-food chain Taco Bell's first Russian outlet.

The mall's first expansion stage, which is to take place next year, will add at least 30,000 square meters of space, 50 stores and 300 parking spaces, Odlund said, adding that it would add $140 million to total sales per year. MEGA will have an ice-skating rink and child-care facilities, IKEA said, while the mall's 300 security guards will be dressed in colorful suits and also act as hosts. MEGA will create 5,000 jobs, IKEA said, and a new access road and pedestrian bridge over the MKAD will be built.

IKEA has built similar shopping centers in other countries, including Austria, Poland, the Czech Republic, Sweden and Switzerland, but these projects pale in comparison to MEGA, Binnmyr said. Retail space in Moscow doubled last year, reaching 438,500 square meters, according to Styles & Ryabokobylko. By 2003 retail space should double again, the real estate firm said.

City Star, a 108,000-square-meter shopping center near Kursky Station, will temporarily become Russia's biggest mall when it opens in May. "This is the next phase in bringing Moscow to the retail standard of a market economy," Gerald Gaige, partner for valuation services and real estate consulting at Andersen, said in a telephone interview.

Moscow went from updating individual stores to groups of stores like TsUM and Petrovsky Passazh, Gaige said. Then big stores like IKEA and Ramstore appeared, drawing customers to certain locations rather than relying on passers-by. Now Moscow is ready to support malls offering restaurants, entertainment and sports, Gaige said, "neighborhoods for spending money."

-- (lars@indy.net), April 16, 2002

Answers

Lenin turns in his grave as the capitalists revel in their tacky triumph.

Taco Bell in the Worker's Paradise? How much can one murderous Utopian endure?

-- (lars@indy.net), April 16, 2002.

More Amerikkkan kultural imperialism. The tasteless mall is being built on honored parade grounds where Soviet Youth and Workers once marched shoulder to shoulder carrying flags, singing the Internationale.

-- (Noam Chompsky@MIT.edu), April 17, 2002.