OREANDA-NEWS. January 5, 2010. X5 Retail Group N.V., Russia’s largest retailer in terms of sales (LSE ticker: “FIVE”), and Perfumes Planet Switzerland (PPS), today announced they have entered into a partnership agreement.

In accordance with the agreement, PPS and X5 will set up a joint venture that will develop perfume selling points adjacent to X5’s food retail stores in Moscow, Saint-Petersburg, Nizhny Novgorod and respective regions. PPS and X5 will own 80% and 20% of the joint venture, respectively. At the initial stage, perfume selling points will be opened mainly in Moscow and the Moscow region.

X5 will offer the joint venture to lease or sublease space of 15-30 sq.m. next to X5's cash desks (outside of X5's stores) at commercial market rates. In its turn, PPS will contribute its proprietary perfume business “know-how” and provide 100% of the financing needed to develop the business for the first three years. The agreement grants X5 a call option to acquire the entire business in three years.

Lev Khasis, CEO of X5 Retail Group, commented:

"This partnership is a good way to provide additional convenience to our customers by locating perfume selling points right next to X5 food retail stores and offering consumers an opportunity to buy high quality perfume products at attractive prices. If the business proves to be a success, we will consider buying it out or selling our stake to third parties. This partnership does not imply any cash investment from X5, while it further enhances customer appeal of our stores."

Guillaume Vanthier, СЕO of PPS Russia, added:

"Thanks to the joint venture agreement with X5, we have a unique opportunity to enter the Russian market with its huge growth potential, allowing us to look to the future successful development of our company with confidence. We believe, that the new format of perfume by PPS, which is well-known and popular in Europe, be in demand by Russian customers. We are proud to work together with such a reliable partner as X5 and consider this as an important step towards our successful co-operation going forward."