Reliance to partner Marks & Spencer

NEW DELHI: Marks & Spencer (M&S) on Friday announced a 51:49 joint venture with Reliance Retail, part of the Reliance Industries Group, to set up a chain of Marks & Spencer stores in India. The JV company, M&S Reliance India, aims to open at least 50 new stores in India over the next five years. The announcement is part of M&S plans to grow its international business to 15-20% of group revenues within the next five years.

Apparently, M&S��� JV talks with its existing Indian franchisee, Planet Retail, failed as the latter was unwilling to take minority position in the India business. However, Planet Retail, which has been an M&S franchisee for the last seven years, will continue to hold franchisee rights for the 14 existing M&S stores.

ET, in its edition dated February 25, had reported about the prospective JV between M&S and Reliance Retail, and followed it up with a report on March 31 that M&S would pick up a majority stake in the proposed JV. The fact that Reliance Retail relinquished a majority stake to the UK apparel-to-food brand shows its willingness to partner global brands for exposure, knowhow and clout.

The chief executive officer of the JV company, Marks & Spencer Reliance India Pvt Ltd, will be Mark Ashman and the chief financial officer will be Jatin Luthra. The new joint venture will have the right to operate M&S stores in India, selling items such as women���s, men���s and children���s clothing as well as homeware.

M&S chief executive Sir Stuart Rose said in the media release: ���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 for us to accelerate our expansion and create the opportunity to open much bigger M&S stores.���

Reliance Industries chairman Mukesh Ambani said: ���We are excited to partner with M&S to combine Reliance���s understanding of the Indian marketplace, and its traditional strengths in areas such as technology, infrastructure, logistics and training with M&S��� legendary retailing and product development capabilities to deliver a delightful experience to Indian consumers.���

According to Marks & Spencer Reliance India Pvt Ltd CEO Mark Ashman, M&S would open bigger stores, selling a wider range of products at lower prices, including a growing number of products sourced from local suppliers.

M&S is one of the UK���s leading retailers with 600 stores in the UK and over 275 stores in 39 territories around the world. Its total group revenues for 2006-07 were ��8.5 billion. In November 2007, at its interim results, M&S identified significant opportunities to grow its international business under the leadership of Carl Leaver, its director for international business, targeting a 15-20% contribution to its group revenues within the next five years.