My friend Sergei Galtisky has certainly made a name for himself and his company Magnit in the 11 years since I first met him in the Summer of 1995. Sergei represents the best of Russia’s newest crop of young entrepreneurs. Sergei has built Magnit (Tander) from a small wholesale operation serving the local markets of Krasnodar to now the largest grocery store chain in all of Russia.
Magnit was originally a spin-off from Transasia which in the Summer of 1995 won the exclusive wholesale distribution contract for Krasnodar Krai from Procter & Gamble based on a business plan I wrote while working with Sergei, Vlad, Pasha, and Artur (you can see Vlad, Pasha, and Artur in the photo in the right-hand sidebar) between 1st and 2nd year of business school. Tander, which later changed its name to Magnit, was formed when P&G told the guys that Transasia couldn’t carry competitors’ products. Not a problem Cincinnati. They just created a sister company, Tander (Magnit). The results have been impressive. Magnit does over $2 billion in sales and Transasia does more than $250 million.
Recently, there were even rumors that Walmart is looking at acquiring Magnit as a springboard to entering the Russian marketplace. If true, it would be very ironic. I remember traveling to Temple, Texas in 1998 with Sergei to meet Drayton McLane who had then recently sold his company McLane Company to Walmart. Afterwards, hungry for more knowledge of US retailing, Sergei insisted that we purchase a privately produced corporate history report of Walmart written by Management Ventures, Inc. The book cost almost $2,500 and after having it translated, Sergei almost quite literally memorized it.
My fondest memories from that time are from the tennis courts. Sergei and I would go over to the old Soviet stadium Trud (translation “Labor Stadium”) where we would pretend to be playing Davis Cup – US vs. Russia. Sergei’s driver would often leave to get us water at a local kiosk but would invariably come back with bottles of Pepsi to quench our thirst. After one hour we would be bumped by the local “Bolliteri.” We would then get driven back to his mother-in-law’s for a traditional Russia supper. Good memories!
Here’s what Kommersant had to say,
Millionaires and Billionaires, Kommersant by Vasily Panin
Yet another fresh face in the rankings appears at number eleven in the person of Magnit general director and controlling shareholder Sergei Galitsky, whose company owns the eponymous chain of 1,600 grocery stores found in more than 400 Russian cities and towns. Another shareholder in Magnit, former general director Vladimir Gordeychuk, is in 55th place in the rankings.
Mr. Galitsky took over from Mr. Gordeychuk as general director before the company’s Russian IPO in spring 2006. The analysts’ verdicts on the offering have been mixed. Some believe that the shares were floated at the maximum possible price, while others think that the price could have been higher.
Sergei Galitsky, an economist by training, is Russia’s richest retailer. He entered the business world in 1994 by founding the distribution company Transasia with several partners. In 1998, he founded the discount grocery chain Magnit, Russia’s first, in Krasnodar.
