Mumbai: British retail giant Marks & Spencer Group plc has entered into a joint venture with multi format retail chain operator Reliance Retail Industries Group with the aim of establishing a presence in the Indian retail sector.
Marks & Spencer will take a 51 per cent stake in the Rs230 crore ($57.9 million) joint venture, Marks and Spencer Reliance India Pvt Ltd, with Reliance Retail taking the remaining 49 per cent.
''The value of the initial investment into the JV will be up to £29million (in cash or in kind) between the parties, with both parties agreeing to provide further funding in the future,'' Marks & Spencer said in a release.
The joint venture, however, is subject to the satisfaction or waiver of certain conditions, including approval from the Foreign Investment Promotion Board, it added.
Under the agreement, the joint venture will operate Marks & Spencer stores in India selling items such as women's, men's and children's clothing as well as homewares.
The joint venture aims to open at least 50 new stores in India over the next five years.
Planet Retail, Marks & Spencer's existing franchise partner in India, however, will continue as a franchisee in respect of the 14 existing franchise stores.
Marks & Spencer plans to grow its international business to 15-20 per cent of group revenues within the next five years, the retailer 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,'' said Stuart Rose, chief executive of Marks & Spencer.
''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.'' Mukesh Ambani, chairman of Reliance Industries, said.
Mark Ashman and chief financial officer of Marks & Spencer, will be the chief executive officer of Marks and Spencer Reliance India Pvt Ltd and Jatin Luthra will be the chief financial officer.
Marks and Spencer Reliance India Pvt Ltd is currently named Tapti Trading Private
Marks & Spencer, one of the UK's leading retailers, employs over 75,000 people and has over 600 stores in the UK and over 275 stores in 39 territories around the world. The Marks & Spencer Group had revenues of £8.5 billion in 2006-7.
Reliance Retail Limited (RRL), a subsidiary of Reliance Industries Limited, opened its
first retail store in November 2006 and today operates over 500 stores in over 49
cities spanning over 3.5 million sq ft.
RRL operates Reliance Fresh, Reliance Digital, Reliance Mart, Reliance Trends, Reliance Wellness, Reliance iStore, Reliance Footprint, Reliance Jewels, Reliance Time-Out, Reliance Super and Reliance AutoZone.