why Auchan’s real estate subsidiary discreetly sells shopping centers it operated in the country

The real estate subsidiary of the French company has sold several shopping centers for an unknown amount. The buyer is a mysterious Russian company created a few months ago.

Auchan, Leroy Merlin… These French brands decided to stay in Russia when most large Western companies decided to leave the country, after the invasion of Ukraine. The two companies in the Mulliez galaxy remain well established in Russia. Auchan was widely criticized for this choice, notably by Ukrainian President Volodymyr Zelensky.

But we recently learned that Nhood, Auchan’s real estate subsidiary, sold the shopping centers it operated in the country. This surprise sale perhaps announces a desire to disengage or in any case to limit the damage in a market which has become very high risk.

This affair is almost unbelievably opaque. The French side and the Russian side compete to see who says the least. The Russian press claims that Auchan’s real estate subsidiary has sold 40 shopping centers, but Nhood’s headquarters in France speaks of only 19.

The buyer is a mysterious Russian company, created a few months ago and headed by a young 23-year-old lawyer who no one knows and who has all the appearance of a nominee. This company seems to have deep pockets since it has positioned itself for the acquisition of other shopping centers in Russia. The amount of the transaction is unknown, but it is certainly not a good deal for the French group. The Russian government imposes a discount of at least 50% for Western companies that want to leave the country. It’s a kind of exit tax.

A profit divided by ten

And the negotiation takes place under the threat of outright seizure of property by the State. This is what happened to Danone, which saw its factories placed under temporary management, before being able to reach an agreement with a buyer for an amount, also unknown.

This does not mean, however, that Auchan will close its stores in Russia, the company immediately clarified, which is particularly monitored by the Russian authorities. Because there is a social issue: the brand employs 30,000 employees. The brand has declared that it does not intend to close its 230 Russian stores, even if its business is significantly less flourishing: turnover down 5% in 2023, profit divided by ten. Hence perhaps this desire to cede what can still be, the walls, even at a bargain price.