British fashion retailer Marks & Spencer plans to expand in India
12 November 2013
Marks & Spencer, Britain's biggest clothing retailer, on Monday opened its largest store in India in Mumbai as part of its plans to expand operations across the country.
Marks & Spencer (M&S), which operates through an alliance with Reliance Retail, plans to have 80 stores across India by 2016, making it the largest outside the UK.
"India is a priority market for us and we are working closely with our partner Reliance Retail. We see India becoming our largest market outside England by 2016. We have set a clear plan to build a leadership position here. We are targeting around 80 stores here by 2016," M&S chief executive Marc Bolland said.
Spread over 35,000 sq ft over five floors, the M&S store in Bandra, in Mumbai is the joint venture's largest store in the country offering over 300 products.
While Marks & Spencer wants to grow in India, a huge market with annual apparel sales of $38 billion, the company is yet to make its presence felt here.
M&S, which set up shop in Asia's third largest economy in 2000, has lost its "first mover" advantage to rivals Inditex SA and has been struggling to grow and has not made any profit in India since 2009.
Marks & Spencer Reliance Retail Ltd reported a net loss of Rs2.6 crore in the year ended March 2012 on gross revenue of Rs280 crore, according to regulatory filings.
Against this, rival Inditex Trent Retail India Ltd, which operates Zara stores in India, reported a profit of Rs38.3 crore on total income of Rs260 crore during the same period, according to filings with the Registrar of Companies.
The Inditex JV, set up in 2010, saw profits rise 18 per cent to Rs45.2 crore in the year ended March 2013.
M&S, which has built its global recovery plans around offering higher quality, more stylish fashion clothing, however, failed to make profit for nine straight quarters. Its first half profits fell nine per cent.
The retailer had initially joined forces with local franchise partner Planet Retail, marketing itself as an exclusive, expensive brand. But that strategy failed and M&S then tried to sell itself as an affordable, quality brand with a joint venture with Reliance Retail, a unit of Reliance Industries.
M&S, which now has about 35 stores in India, is now trying to get its India operations right, but still on the hope that India's clothing interests will change with the changes that the retailer proposes.