AS Silvano Fashion Group is an international lingerie distribution group involved in design, manufacturing and marketing of lingerie. In addition, the Group provides a limited volume of sewing services to other manufacturers of women’s lingerie.
The Group operates the Milavitsa, Lauma and Amadea retail chains which distribute the Milavitsa, Alisee, Lauma and Laumelle brands in Estonia, Latvia, Lithuania, Russia, Belarus and Ukraine. The Group’s products are also distributed through wholesale channels.
The manufacturing capacity of the Group is comprised of Milavitsa, a lingerie factory located in Minsk (Belarus) and Lauma Lingerie, a lingerie factory located in Liepaja (Latvia). Multiple production facilities in different countries and a diversified multi-brand retail chain add versatility and flexibility to the operations of the Group.
Organization
As of 31 March 2010 the Group operated 52 own retail outlets with a total area of 4,383 square meters. Additionally, as of 31 March 2010, there were 271 Milavitsa branded shops operated by Milavitsa trading partners in Russia, Belarus, Ukraine, Moldavia, Kazakhstan, Uzbekistan, Kirgizstan, Latvia, Azerbaijan, Armenia, and Cyprus, of which 24 shops were opened in Q1 2010.
SP ZAO Milavitsa, established in 1908 and based in Minsk, Belarus, is the largest lingerie sewing factory in Europe. The company manufactures over 17 million lingerie pieces per year, and employs over 1,800 employees.
Milavitsa branded products have the highest brand recognitions in Russia, Belarus and Ukraine and in some other countries. Sales are generated through distributors and dealers, with an emphasis placed on sales through aggressively expanding retail stores in Russia and Milavitsa franchised stores.
Milavitsa has been gradually decreasing the volume of tolling orders, placing emphasis on production of lingerie under its own brand. Part of sewing is already outsourced to other Belarusian companies.
AS Lauma Lingerie, based in Liepaja, Latvia, was established in October 2005 as a split-off of Lauma AS lingerie operations. Its manufacturing capacity is ca 2 million pieces of intimate apparel items per year. The company employs over 140 workers.
Lauma Lingerie is the leader of the intimate apparel industry in the Baltics. Lauma Lingerie produces high ‘value added’ lingerie, focusing on the upper-middle price segment. Quality is owned to the long experience of the company’s in-house designer team. In the CIS markets Lauma has strengthened its client relationships and achieved a good brand recognition for its lingerie products.
In 2006 Lauma Lingerie restructured its product portfolio into two main brands – Lauma Lingerie and Laumelle, and opened its first Lauma Lingerie retail outlet in the Baltics. As at 30 September 2009 Lauma Lingerie already operated 5 stores.
STK Milavitsa ZAO, based in Moscow, is a wholesale distributor of SP ZAO Milavitsa and AS Lauma Lingerie in Russian Federation. Sales in Russia accounted for 58,5% of total lingerie sales of the Group in 2009. The company is also responsible for coordination and supporting of Milavitsa franchising.
ZAO Linret, a trading company, was established in Moscow, Russia to operate retail stores in May 2005 with a main focus on well-recognized brand names of Lauma Lingerie and Milavitsa. The strategic decision to shift focus from own retail chain towards the development of Milavitsa franchise network was made in H2 2009 to terminate the loss making own retail operations in Russia. As the result, the Group’s own Oblicie stores were rebranded to Milavitsa and a transfer of stores to Milavitsa’s trading partners commenced while non-performing stores are being closed. As of 31 March 2010 the restructuring was not yet completed and the Group operated 5 own retail stores in Russia. The management anticipates that the transfer of stores will be completed in Q2 2010.
TK Milavitsa, based in Minsk to operate as an official wholesale distributor in Belarus and to operate own retail chain in Belarus. Currently own retail chain includes 38 stores.
SP Gimil, based in Minsk, is a manufacturing and wholesale company. The company is operating in strong cooperation with SP ZAO Milavitsa. The company employs around 93 people.
Strategic Objectives
The strategic goal of the Group is to become a leading retailer of lingerie and accessories (with its own flexible production facilities) in the markets of the Baltic states, Russia, the rest of the CIS and, in the longer term, Central and Eastern Europe. The Group is planning to develop and fine-tune its business model based on vertical integration of retailing and manufacturing functions across a variety of brands and sectors (such as lingerie, apparel and related merchandise). The Group intends to ensure that most of its products are exclusively available at and sold through the Group’s retail network with differentiated mark-ups reflecting the positioning of each product. This strategy should eventually increase the overall revenues and profits of the Group and create additional value for its shareholders.
The Group intends to achieve these objectives by rapidly expanding and strengthening its existing retail network in existing markets, entering new geographical regions, developing intra-group synergies, and pooling resources and know-how between the various Group companies.