Lenta, one of Russia's largest retail chains, has completed the acquisition of 100% of the voting shares of Era Trading House, which owns the drugstore chain Ulybka Radugi. 

The strategic move is part of Lenta's transformation into a multi-format retail player and strengthens its position in the drugstore segment.  

The acquisition also allows Lenta to tap into the perfume and cosmetics market, which is projected to exceed Rbs1tn ($9.3bn) by the end of 2024. 

Ulybka Radugi has a strong presence in the country's northwestern federal district — a key area for Lenta.  

Drugstores offer convenience and a wide range of personal care, hygiene and home care products at affordable prices.  

As of 30 September 2024, Ulybka Radugi managed 1,535 stores covering 204,000m² and operated three distribution centres.  

The company reported a 17.4% increase in retail revenue for the first nine months of 2024 compared to the previous year, amounting to Rbs29.6bn. 

Lenta Group of Companies CEO Vladimir Sorokin stated: “The purchase of Ulybka Raduga, the second-largest chain of drugstores in the country, is a logical step towards transforming Lenta into a multi-format player. This deal allows us to immediately strengthen our position in the cosmetics and household chemicals segment, which provides significant opportunities to strengthen our presence in the Russian retail market.” 

Ulybka Radugi has developed expertise in customer service, product range management, logistics and IT.  

The chain has also embraced digitalisation by launching its own private labels, franchising, creating an online store, developing a mobile application and partnering with major marketplaces. 

Ulybka Radugi will continue operating under its existing brand and maintain its core processes. The chain plans to expand geographically, especially in the Moscow region, to enhance brand recognition and leverage market potential. 

The Federal Antimonopoly Service of Russia has approved the transaction. Lenta will finance the deal primarily from its cash reserves by 30 June 2025 and will begin consolidating Ulybka Radugi's financials from December 2024. 

The merger brings more than one and a half thousand stores with qualified staff and a loyal customer base to Lenta's portfolio across the central, northwest, Volga and Ural regions — areas where Lenta already has a strong presence.