Why is this Russian Oligarch Making a Run for it?
In recent news, it was reported that Russian oligarch and billionaire Sergey Galitskiy is walking away from his US$8 billion empire. Speculation about the reasons behind this sudden departure is rife and it remains unclear whether it was a practical or an emotional decision.
Setting the Stage for Great Success
Sergey Galitskiy started his vast empire in 1998 with a small grocery store in Krasnodar, his hometown, which is located around 800 miles from of Moscow. The business was named Magnit and achieved fantastic success. For more than 20 years the intrepid entrepreneur expanded operations nationally while raking in substantial profits. Magnit’s growth eventually included over 16,000 stores across Russia, more than US$20 billion in sales and an estimated personal wealth of US$5 billion for Galitskiy.
A Sudden Exit
While Magnit appears to be a thriving concern, investment experts speculate that the chain has been suffering from underlying problems and that Galitskiy has been considering a sale for some time. Galitsky maintains that his decision to sell is due to clashes between him and other shareholders. According to the businessman, the rapid expansion required a focus on profitability as the market demands increase.
Nothing is Forever
Although Galitskiy started cutting his stakes in the retail chain in small increments in recent years, it was not expected that he sell almost all of it. After unloading 29% of the company to TB Group, a state-controlled entity, for US$2.5 billion, Galitskiy relinquished his role as chief executive of Magnit and, left with a paltry 3% in shares, simply walked away. The businessman was quoted as saying, “It was a difficult decision since I founded this company. But nothing is forever.”