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UPDATE 1-Detsky Mir scales up smaller stores, expands online

(Adds detail, background)

Aug 25 (Reuters) - Russia’s biggest children’s goods retailer Detsky Mir plans to roll-out a new compact store format to target smaller towns, while also ramping up online sales, it said on Tuesday.

The company, which sells toys and baby food among other products, said it planned to open at least 800 of the new smaller stores by the end of 2024.

Under the new strategy, the retailer also plans to expand its pet goods chain Zoozavr, with medium-term plans to open at least 500 outlets and achieve 30% of pet supplies sales online.

Detsky Mir reported a 2.9% rise in second-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to 3.6 billion roubles ($8.1 million), as the easing of coronavirus-related restrictions boosted sales.

Revenue grew 2.9% in the second quarter, down from 16.3% a year ago, but recovering from a 20% slump in April.

In July, the company said it expected a rise in second-quarter adjusted EBITDA, without giving an exact forecast.

“In July, we fully brought our business back to normal, returning to double-digit growth in total sales at 13.9% year-on-year,” CEO Maria Davydova said in a statement

The company confirmed its guidance to maintain double-digit adjusted EBITDA margin growth.

The share of online sales in Detsky Mir’s total revenue more than tripled in the second quarter to 31.2%.

The company said it was aiming for that to reach 45% over the medium term.

Detsky Mir has increased its number of stores by more than a third since it went public in 2017, reaching 850 as of the end of June.

$1 = 74.4622 roubles Reporting by Anna Rzhevkina; editing by Jason Neely and Mark Potter

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