International News - Obi confident of moving into Russia's big cities

German DIY giant Obi has identified 20 cities outside Moscow and St Petersburg for possible future stores.

Tengelmann-owned Obi expects to open its first Russian store in Moscow by October, according to board director Sergio Giroldi.

A further seven or eight will open in the Moscow area in the next three years and the first lease in St Petersburg could be signed by the end of this financial year, he said.

Speaking at the Second International Forum for the Russian Retail Sector, Giroldi said: 'Our strategy is to open first in Moscow and St Petersburg, and then look at the other Russian cities.'

Giroldi, who is responsible for Obi's European operations outside Germany, said: 'We think there are about 20 other (cities) in Russia where we could open stores.'

Obi operates 468 stores through franchise partners, including 342 in Germany. The stores generated turnover of EUR 5.6 billion (£3.85 billion) in the last financial year.

One source familiar with retailing in Russia said: 'It makes sense because there are about 20 cities that have populations over 1 million. To be that confident of opening eight stores in Moscow over two years, they probably have all the sites secured already, because the process usually takes about three years.'

Giroldi said Obi also plans 50 openings in China over the next five years, where it will face competition from B&Q.