Magnolia Sells Cakes in Moscow Under Cloud of Import Ban

Photographer: Rich Press/Bloomberg

Cupcakes at a Magnolia Bakery in New York City. Close

Cupcakes at a Magnolia Bakery in New York City.

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Photographer: Rich Press/Bloomberg

Cupcakes at a Magnolia Bakery in New York City.

Magnolia Bakery, the New York cupcake maker made famous by its appearance on the “Sex and the City” TV show, is tempting the palates of young Muscovites with the opening of its first store in Russia’s capital today.

The company, which has U.S. stores in New York, Chicago and Los Angeles, as well as overseas locations such as Tokyo and Dubai, plans to open at least five cafes in Moscow over the next few years, Steve Abrams, owner and chief executive officer, said in an interview.

Magnolia, which offers gourmet cakes, puddings, pies and brownies, is setting up shop amid a $9.5 billion ban by Vladimir Putin on food imports from nations that have supported sanctions against Russia over its conflict with Ukraine. This month, McDonald’s Corp.’s Russian business shut six Moscow restaurants on the order of a consumer-safety agency, which said it found multiple violations of sanitary rules.

While the ban certainly gave Abrams pause for thought, he remains undeterred and says Magnolia will be “fine with local ingredients.”

“We’re a happy brand, not worried about the politics,” he said in an interview yesterday. “We think Russia in general can be a bigger play for us.”

Magnolia’s Moscow store will offer a range of pastries as well as banana pudding at 120 rubles ($3.32) to 265 rubles, Sara Gramling, a spokeswoman, said in an e-mail. The store is located in central Moscow at Kuznetsky Most.

Photographer: Andrey Rudakov/Bloomberg

Magnolia Bakery tempts the palates of young Muscovites at its new Moscow store. Close

Magnolia Bakery tempts the palates of young Muscovites at its new Moscow store.

Close
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Photographer: Andrey Rudakov/Bloomberg

Magnolia Bakery tempts the palates of young Muscovites at its new Moscow store.

Russian Influence

Magnolia will in time introduce products influenced by Russian culture, Abrams said. Magnolia’s sales across its stores average $2,000 per square foot and sales at the Moscow cafe are forecast to be above the average, he said.

“Magnolia’s combination of the legacy of ‘Sex and the City’ and deliciousness should become really popular in Russia,” said Dasha Timakova, 29, an investor relations director at Arbat Capital in Moscow. “We really have very few such cafes. The more places like that open in Moscow, where you can have coffee with a girlfriend or a business meeting, the better. This would be an ideal format.”

For stores outside the U.S., Magnolia teams up with franchisees. The Moscow cafe will be run by Liliya Nikolaeva, who runs the Crazy Daisy bar and Far Rockaway restaurant in the capital, Gramling said.

Family Roots

Abrams has visited Moscow and his family has Russian origins, and with Magnolia’s expansion, he says it “feels good to be able to come back to my roots a little bit.”

Magnolia isn’t the only U.S. business unfazed by Russia’s curbs on food imports. Shake Shack, a U.S. fast-food chain, plans to open its second Moscow location in October after opening the first restaurant last year.

Magnolia, which has been in business since 1996, also has stores in Abu Dhabi, Beirut, Kuwait City and Doha, according to its website.

It plans to open a store in Mexico City next month and has signed deals for cafes in Sao Paulo, South Korea, Singapore and Hong Kong, Abrams said. The company is also negotiating to open a store in the Philippines.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Ben Livesey, Nick Turner

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