Mumbai: HCL Technologies Ltd has announced the formation of a strategic technology joint venture (JV) with Jones Apparel Group Inc, a Fortune 500 company headquartered in White Plain, USA, which is a leading designer and marketer of branded apparel, footwear and accessories.
The JV is a pioneering initiative, in synergy with HCL Technologies' rebalanced business portfolio and growth strategy, wherein the company has identified the retail vertical as a high-focus area. Worldwide, an increased surge in IT spending in the retail segment is manifesting itself and the market is expected to grow to $35 billion by 2005.
The equity holding of HCL Jones Technologies, as the new company will be christened, is structured at HCL Tech 51 per cent and Jones Apparel at 49 per cent. The JV will significantly augment HCL Technologies' expertise in the retail vertical.
The JV will bring together the domain knowledge of Jones Apparel, which has built a reputation over the years for excellence in operational execution, with HCL Technologies' high-quality offshore delivery capability and composite technology bandwidth. This synergy of strengths should position the JV as a premier IT solutions provider in the emerging global retail market space.
HCL Jones Technologies will provide development, maintenance and implementation services to various divisions of Jones Apparel as well as other companies in the retail and wholesale apparel space. The JV will also productise its offerings for additional business and revenues.
Jones Apparel will bring resources, retail domain expertise and a committed revenue stream to the venture. HCL Technologies will contribute capital and offshore services expertise.
"Our enhanced focus on the retail services market is a strategic move, in line with market dynamics, and is critical to our leadership in IT services. The new JV will leverage Jones Apparel's retail competency and their management team's ability to innovate and execute aggressively," says HCL Technologies chairman, president and CEO Shiv Nadar.
"Together with HCL Technologies' robust offshore delivery capability and considerable expertise in the retail domain, this will give HCL Technologies a strong competitive advantage and enabled increased market access," Nadar adds.