MAGNIT UPDATES ITS MAGNIT COSMETIC FORMAT

Krasnodar, Russia (August 17, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia's leading retailers, presented a new concept for its Magnit Cosmetic format, turning the store space into a beauty salon and complementing it with digital solutions and additional services. The updated design focuses on the idea of #MeTime, meaning time for privacy and doing what you want to do. For the pilot, the Company picked three stores in Krasnodar region, two of which have already opened their doors.

Magnit continues to adapt its Cosmetic stores to fit the changing consumer needs in order to help its customers - primarily women - take care of their home and family and, most importantly, take care of themselves. Under the new concept, the store was split into two zones, "emotional" and "rational", which differ in appearance, equipment setup, and lighting.

The "emotional" part of the sales floor showcases Magnit Cosmetic's signature pink paired up with a deep burgundy and has round accent lighting fixtures and large mirrors. Make-up "islands" boast a rich storm blue color. All this allowed the Company to create a "beaty salon" ambiance in the store. The "rational" part makes use of light pastels and natural materials like cream-colored veneers as well as various floodlamps and spotlights. The stone floor tiling and ceiling in both parts of the store have a powdery pink look that reinforces the feeling of comfort and tranquility for the customers.

The store has an area for men's products as well, which is also highlighted with a rich blue. The design also incorporates eco-friendly elements, for example, the health products area is decorated using natural wood.

The new concept focuses on beauty categories. The exact assortment depends on the store's cluster - for example, stores in the Metropolis cluster primarily focus on cosmetics (make-up, perfumes, face and hair care). Such stores also implement the largest number of hi-tech innovations and offer additional customer services, for example, coffee and other beverages to go.

The updated concept as a whole involves a slew of digital solutions already piloted in the Company's other formats. Among these are flipping checkout terminals (which can operate both as a self-service kiosk and as a traditional staffed checkout desk), E-Visage virtual make-up testing technology ("smart mirror"), facial recognition payments, and interactive customer displays. In-store LED screens, price checkers, and radio have been combined into a unified media content system enabling centralized management of marketing communications and allowing the store to adapt to new promotions.

Previously, Magnit updated assortment clustering principles for Magnit Cosmetic to reflect the location of the store and adapt the offering to consumer demand in different geographies, establishing three clusters: Metropolis (has a wider assortment of products "for her"), City (has a balanced offering), and Village (has more products "for home" and "for family").