Reliance Retail inks JV deal with Marks and SpencerApril 19th, 2008 - 12:20 am ICT by admin
Mumbai, April 18 (IANS) Mukesh Ambani-led Reliance Retail Ltd (RRL) will set up a joint venture firm with British food retailer Marks and Spencer (M&S) with an initial investment of 29 million pounds (Rs.2.3 billion). M&S will hold 51 percent stake in the JV, while the remaining will be held by RRL. The new firm will be named Marks and Spencer Reliance India Pvt Ltd, according to an RRL release issued here Friday.
The proposal is awaiting approval from the Foreign Investment Promotion Board (FIPB) of India. Though the initial investment will touch 29 million pounds (in cash or in kind), both firms have agreed to go for further funding as and when required.
Commenting on the deal, Reliance Industries chairman Mukesh Ambani said: “Marks and Spencer is a very well respected brand globally. At Reliance, we have always strongly believed in the power of the Indian consumer market.”
The JV will have the right to operate M&S in India, selling items such as women’s, men’s and children’s clothing as well as home wares.
In the first five-year phase, the JV plans to open at least 50 stores across India with M&S’ existing franchise partner - Planet Retail.
M&S chief executive Sir Stuart Rose said: “India is a very exciting opportunity for M&S and a market where there is the potential for us 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 stores.”
The announcement is part of M&S’ plans to grow its international business to 15-20 percent of group revenues within next five years.
According to the release, the CEO of the JV will be Mark Ashman, while the chief financial officer will be Jatin Luthra.