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. Last Updated: 07/27/2016

Arbat Prestige to Buy St. Pete Landmark

Cosmetics and perfume retailer Arbat Prestige is set to buy St. Petersburg's famed Yeliseyevsky store, Yury Shcherbakov, vice president of Yeliseyevsky owner Parnas-M, said Wednesday.

Parnas-M is in the final stages of negotiations with Arbat Prestige for 940 square meters of Yeliseyevsky's retail space on Nevsky Prospekt, Shcherbakov said.

Vladimir Nekrasov, general director of Arbat Prestige, declined to comment on the issue.

Parnas-M, one of the country's top 10 meat producers, is part of the St. Petersburg-based Parnas holding, whose businesses range from the production of women's undergarments to grain storage.

"We are restructuring the holding to focus on our core businesses," Shcherbakov said, explaining the reasons behind the sale.

Many manufacturers ran their own retail operations in the 1990s, Shcherbakov said, as Parnas-M did at Yeliseyevsky. He could not recall when the company acquired the store. It is becoming unprofitable for the firm to run its own stores now, "especially with having to [pay for the] upkeep of all that gold," Shcherbakov said.

Yeliseyevsky's gilded interiors and opulent chandeliers are features that set apart both of its locations, which have operated in the hearts of Moscow and St. Petersburg since the beginning of the 20th century.

The Yeliseyevsky on Tverskaya Ulitsa in Moscow, managed separately from the St. Petersburg store, is currently controlled by casino mogul Yakov Yakubov, according to local media reports.

"The Yeliseyevsky store is, without question, one-of-a-kind," said Anna Savenko, commercial real estate expert at Jones Lang LaSalle.

Acquiring Yeliseyevsky would give Arbat Prestige access to Nevsky Prospekt, St. Petersburg's main artery for shoppers and tourists, Savenko said.

Arbat Prestige currently operates two stores in St. Petersburg and 17 in Moscow and the surrounding region.

Savenko pegged average real estate rates on Nevsky Prospekt at $10,000 per square meter. Shcherbakov declined to comment on Yeliseyevsky's price.

The sale requires a lot of paperwork, so it will be completed two to three months from now at the earliest, Shcherbakov said.