July 01, 1996


Rising profits at Moscow’s best known department store, GUM (the State Universal Store), have prompted its owners to plan major changes to its profile. Some $27 mn in 1995 net profits will be used towards renovation and expansion of the existing store to include two extra stories, a basement food hall and 40 new escalators. Meanwhile, new malls are planned in five provincial cities. GUM has also introduced American Depositary Receipts, equivalent to two company shares, to be traded on the over-the-counter market in the US.

After an 8-year presence on the Russian market, ice-cream producers Baskin-Robbins have opened their largest European factory, in a suburb of Moscow, in a ceremony attended by Britain’s Prince Michael of Kent. It cost $30 million to build, and is two-thirds owned by British multinational Allied Domecq and one third by the Russian government. The factory plans to produce 70 tons of ice-cream daily, half as much as in all the city’s other plants put together. However, a Russian preference for cheaper, fattier domestic brands will make further inroads into the market problematic. Baskin Robbins is aiming for a 10% share of the market.

Pepsi has launched its new advertising campaign, ‘Project Blue’, with a special focus on Russia. To illustrate its color change — to a new blue logo — the campaign includes promotion on the Mir space station and a Red Square appearance by supermodel Cindy Crawford speaking in Russian. Pepsi has set the task of jazzing up its flagging image in Russia. Unlike Coke, which appeared relatively recently and has made big inroads into the market, Pepsi has been around for several decades, prompting  many Russians to consider it an almost Soviet product and abandon it in for Coke.

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