Britain's leading retailer Marks and Spencer Group (Marks & Spencer) announced its joint venture with Mukesh Ambani-promoted Reliance Retail on Friday, involving an initial investment of £29 million (Rs 230 crore), with plans to set up 50 stores over the next five years.
M&S plans to pick up majority stake of 51% in the joint venture, Marks and Spencer Reliance India Pvt Ltd, while the balance will be held by Reliance Retail, once its application is cleared by the Foreign Investment Promotion Board.
The UK-based clothing and food retailer expects to increase sourcing from India and bring into the country a wide range of products from its global portfolio through its proposed stores.
“We intend to open bigger stores, selling a wider range of products at lower prices, including a growing number of products sourced from local suppliers,” Marks and Spencer Reliance India CEO Mark Ashman said.
“Subject to FIPB approval, we will open our first store in six to nine months. To begin with, the focus will be on cities like Delhi, Mumbai, Hyderabad and Bangalore, and in next couple of years we will also go to tier II and tier III cities,” he added.
The new joint venture will have the right to operate Marks & Spencer stores in India selling items such as women’s, men’s and children’s clothing as well as homeware. Planet Retail, Marks & Spencer's existing franchise partner in India, will continue as a franchisee in respect of the 14 existing franchise stores, says a company statement.
This announcement is part of Marks & Spencer's plans to grow its international business to 15-20% of group revenues within the next five years.
Sir Stuart Rose, CEO, Marks & Spencer said: “India is a very exciting opportunity for Marks & Spencer and a market where there is the potential for M&S to become a major retail brand. Reliance Retail is the ideal partner for us to accelerate our expansion and create the opportunity to open much bigger M&S stores. We have been very impressed by their strength in technology, logistics and property and the speed with which they have become a major player in India's retail scene.”
The joint venture company is at present called Tapti Trading Pvt Ltd. Commenting on the development, Reliance chairman Mukesh Ambani said: “M&S is a very well respected brand globally. At Reliance, we have always strongly believed in the power of the Indian consumer market. We are excited to partner with M&S to combine Reliance's understanding of the Indian marketplace, and its traditional strengths in the areas such as technology, infrastructure, logistics and training with M&S's legendary retailing and product development capabilities to deliver a delightful experience for Indian consumers”.
£8.5-billion M&S employs over 75,000 people in over 600 stores in UK, and over 275 stores in 39 territories around the world.
Source: Economic Times