Retailer Magnit Shook by Sudden Departure of Five Top Managers

Five top executives at the second-largest food retailer in Russia, Magnit, have left the company in an unexpected move, Vedomosti reported on Tuesday. 

The company confirmed the report but denied Vedomosti’s information that Chief Financial Officer Elena Milinova would also depart. A Magnit spokeswoman told Reuters on Wednesday that Milinova will continue to work for the company.

The spokeswoman confirmed, also without giving a reason for the departures, that the director of Magnit’s Ural District Sergey Sachenko, the director of the North-Western District Sergey Vydrin, marketing director Dmitry Sitnikov, the director for construction of large formats Viktor Lomakin and the director for development and launch Sergey Vinogradov will leave their posts.

Magnit is struggling to compete with rival X5 Retail Group and posted a 57% drop in third-quarter net profit compared with the same period a year earlier. In April, it suddenly dropped a $1.8 billion bid for smaller competitor Lenta.

Some of those leaving the company previously worked at X5 with former Magnit CEO Elena Naumova.

Naumova left Magnit in June after just a year in the role due to disagreements over the company’s strategy. After her departure, Jan Dunning took on the CEO job in addition to his role as Magnit’s president.

Last year, Russia’s second-largest bank, state-controlled VTB, bought a minority stake in Magnit from the retailer’s founder Sergey Galitskiy. VTB later sold part of its stake to Marathon Group, which is owned by several Russian businessmen.