Mar. 30 – French retail giant Auchan, which has never publicized its financial indicators in Russia, has now been compelled to do so in a judicial dispute with tax inspectors.
The operational company of the hypermarket network Auchan, is trying to challenge the decision of the Moscow branch of The Russian Federal Tax Service (FTS) on tax grudges regarding the ministry’s attempt to collect 739.7 billion rubles of taxes, fines and penalties.
In the middle of March the company had submitted the claim to the Moscow Arbitration Court, and has asked for the suspension of the decision of the FTS to prevent it from collecting the disputed sum. The court sided with the company and asked Auchan to show its basic indicators, in particular accounting data, balance sheets and a company report of profits and losses for nine months of the last year.
“As specified in court resolution, the average profit of the retailer in a month is about 15-20 billion rubles. Thus, in 2009 Auchan, could have made a total profit of 180 to 240 billion rubles,” speculates Russian business paper Vedomosti.
From this indicator, the company may oust the leader of the Russian retail trade X5 Retail Group from top spot. The company made 275 billion roubles in net retail profit in 2009. On a profit per square meter indicator of a trade space Auchan could possibly overtake the leader.
There are 36 hypermarkets in Auchan Russian network, thirty-three 20 000 sq. meters department stores and twelve supermarkets about 5000 sq. meters large. As their total area makes more than 300 000 sq. meters, the profit per square unit might be 600,000-800,000 rubles. In comparison, last year X5 reached levels of 258,884 rubles from 1 square meter of a trade space.
According to court definition, the company’s highest debit item is the payments to suppliers averaging 16 billion rubles a month, rent expenses -1.7 billion rubles a month, and employee salaries – 0.5 billion rubles. The company has 3,113 suppliers and towards the end of February 2010, the general debts of the retailer had reached 24 billion rubles.
The Russian market is strategic and one of the largest in the Auchan Group, admit the top-managers of the company. In 2008 the Group’s annual turnover was €39.48 billion. Auchan has not yet opened its 2009 turnover, but if it remains at the previous level, the Russian branches occupy more then 10 percent of the company’s total assets.
As informed earlier Auchan does not plan to reduce the investments into business development in Russia. The company also intends to open six new shops in 2010, two in Moscow and one each in St. Petersburg, Ufa, Kazan and Samara.