European Lingerie Group AS announces the acquisition of AO Avangard, a distribution company in Russia. With the acquisition ELG aims to secure its business in the Russian market, enhancing sales and services to customers in Russia.
In Russia, Avangard distributes medical textiles by Lauma Medical and lingerie materials by Lauma Fabrics, both European Lingerie Group (ELG) companies. The cooperation with Avangard was established in 2012. During these years, the company has generated healthy profits and a stable turnover level.
“We see this acquistion as a good platform for future growth in Russia and CIS. The Russian market is important for us and Avangard as our distributor there has an essential role. Our target is to secure and expand our business in Russia,” said Peter Partma, CEO of ELG.
“Through Avangard, we aim to increase the sales of fabrics to our lingerie customers in Russia and also introduce new medical products. In addition to having a good product it is as important to guarantee delivery on time. Avangard acquisition gives us control over the supply chain, offering stable and centralized logistic services, custom clearance and storage options to our Russian customers,” explained Diana Suprunovica, Board member of ELG.
“The Russian market is large and for business growth we need to establish closer links for all our products. We plan to actively partake in exhibitions, work with industry experts and wholesalers. Avangard acquisition allows us to better address the needs of the Russian market and grow our business,” added Edijs Eglins, General Manager of Lauma Fabrics.
Avangard purchase is financed with internal resources and will have a positive effect on Group’s EBITDA for 2018.
About AO Avangard
AO Avangard is an exclusive distributor of Lauma Medical products in Russia since 2012. Avangard sells goods through regional distributors to pharmacies. Lauma Medical products are distributed to over 25 000 pharmacies in total of which more than 20 000 are in Russia. According to market research data provided by DSM Group, Lauma Medical elastic bandage is in the leading position with ~38% market share in Russia. Avangard has a stable turnover of around 4 million euros.