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The joint venture will involve a natal investment of
US $ 58 million by Marks & Spencer (M & S) and will focus on apparel
and home-ware, reports Indiaretailbiz . The joint venture will also have
the MNC retailer's authority to own and operate iconic M&S stores
in India.
"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 want to combine Reliance's understanding of the Indian
marketplace and its traditional strengths in technology, infrastructure,
logistics and training with M&S's legendary retailing and product
development capabilities to deliver a delightful experience for Indian
consumers," says Mukesh Ambani, Chairman, Reliance Industries.
"India is a very exciting opportunity for M&S
and a market where there is the potential for M&S to become a major
retail brand… "Reliance Retail is the ideal partner to accelerate
our expansion and create the opportunity to open much bigger M&S stores,"
said Sir Stuart Rose, CEO of Marks & Spencer.
Speaking about the joint venture's operations, Mark
Ashman, CEO of Marks and Spencer Reliance India, said, "Our aim is
to have large format stores measuring 5,000 to 20,000 sq ft so that we
can introduce categories such as children's clothing, home-ware, and gift
items. We will make all of M&S's major clothing brands, including
Autograph, Per Una, Limited and Blue Harbour, available in these stores."
"At the moment, our products are slightly more expensive
than in the UK. We want to bring them on par with the UK prices. We are
planning to increase sourcing of raw materials from India so that we can
bring down the cost of our products," added Ashman.
Under the prevailing rules, foreign single-brand retailers
are allowed to invest up to 51% in Indian joint venture companies.
M&S already has a joint venture in India, with Planet
Retail operating 14 M&S stores at present. They will continue to operate.
"Our franchisee agreement (with Planet Retail) is due to end this
year. But we are looking forward to expanding the agreement. We are not
going to close any of our franchisee stores," said Ashman.
Unlike Wal-Mart, Carrefour, and Tesco, who, being multi-brand
retailers are not allowed to invest in India, M&S will have no difficulty
in obtaining requisite statutory permissions from the authorities as up
to 51% stake is allowed to foreigners who want to sell their products
under a single brand. M&S is the world's largest retailer of private
labelled goods under its own single brand.
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