The Hindu Business Line : Marks & Spencer forms joint venture with Reliance Retail

Hyderabad, April 18 UK retailer Marks and Spencer Group and Reliance Retail, part of the $27.13-billion Reliance Industries Group, have announced a joint venture in India.

The value of the initial investment in the venture will be up to £29 million (in cash or in kind) or Rs 230 crore between the parties, with both agreeing to provide further funding in the future.

The new joint venture signals the major foray into India of the UK retailer. It 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 home wares. It will aim at opening at least 50 new stores in India over the next five years.

According to a press release, the UK retail major has entered into an agreement with Reliance Retail (which currently has over 500 stores in over 49 cities spanning over 3.5 million sq ft.) with the goal of establishing Marks & Spencer as a major retail brand in India.

Subject to the satisfaction or waiver of certain conditions, including the receipt of approval from the Foreign Investment Promotion Board, Marks & Spencer will take a 51 per cent interest in Marks and Spencer Reliance India Pvt Ltd with Reliance Retail taking the remaining 49 per cent.

It is envisaged that Planet Retail, Marks & Spencer’s existing franchise partner in India, will continue as a franchisee in respect of the 14 existing franchise stores. This announcement is part of Marks & Spencer’s plans to grow its international business to 15-20 per cent of Group revenues (£8.5b (2006-07), within the next five years, the release said.

Sir Stuart Rose, Chief Executive, 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”.

Mr Mukesh Ambani, Chairman of Reliance Industries, said: “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.”

The Chief Executive Officer of Marks and Spencer Reliance India Pvt Ltd will be Mr Mark Ashman and Chief Financial Officer will be Mr Jatin Luthra. Marks and Spencer Reliance India Pvt Ltd is currently named Tapti Trading Pvt Ltd.