Marks & Spencer is to enter into a joint venture aimed at establishing itself as a major retail brand in India.
The JV is with Reliance Retail, part of the Reliance Industries Group.
Marks & Spencer will take a 51% interest in the venture, with Reliance Retail taking the remaining 49%.
The combined investment will be £29m, with both parties agreeing to provide further funding in the future.
The new joint venture will 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 to open at least 50 new stores in India over the next five years.
Planet Retail, Marks & Spencer’s existing franchise partner in India, is expected to 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% of group revenues within the next five years.
M&S chief executive Sir Stuart Rose 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”. He further said, “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”.
Mr. Mark Ashman will take on the role of chief executive officer of Marks and Spencer Reliance India. Mr. Carl Leaver, director of international business at Marks & Spencer, said,“There is already a strong demand for great quality, good value Marks & Spencer products in India”. Further he said, “Partnering with Reliance Retail will enable us to accelerate our growth in this dynamic economy. We intend to open bigger stores, selling a wider range of products at lower prices, including a growing number of products sourced from local suppliers.”
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Marks and Spencer’s franchisee agreement with Planet Retail Holdings Pvt. Ltd, which comes to an end on 31 July, will also be extended.
“Both stores will continue to coexist,” Ashman said. “We want to be flexible on on this. But our focus will be on opening larger stores.”
The combined investment will be £29m, this is very big deal and both company are very much interested to grow the business with this deal.
It is a great agreement between reliance retail and Marks & Spencer,according to this agreement ,Marks & Spencer will take a 51% interest in the venture, with Reliance Retail taking the remaining 49%.
Though this agreement obviously the market growth will be very high.