Mangalore: World Famous Retailer Marks & Spencer’s to Make Foray into City
Inputs: Business Intelligence-Middle East and Agencies
Daijiworld Media Network – Mangalore (NR)
Mangalore Nov 20: Happy tidings are here, for those die-hard foreign brand shoppers in the city. A joint venture foray of 51- 49 in the country is on the anvil by Britain’s famous retailer brand, Marks & Spencer (M&S).
This move of M & S is part of its larger global business strategy, as it seems to have a firm belief in India’s formidable growth story. Currently three or four Indian partners are said to be keen to take part in this joint venture, since single brand retailers in the country are allowed equity only up to 51%.
Brief history of Marks & Spencer: It has an annual turnover of over US$16 billion and is a huge UK-based retail giant with over 400 stores located in the UK and 150 stores worldwide, including over 130 franchise businesses operating in 35 countries. It's the largest clothing retailer in Britain, and a multi-billion pound food retailer. M&S shops sell both apparel and foods. It also has a third line of business - selling home ware like bed linen - but this is far smaller than the other two segments.
With the India growth story assuming an almost celebrity status, and thereby having a belief in the higher purchasing power of the burgeoning Indian middle class, M & S is planning to sell all kinds of food, confectionery, snacks and home furnishing in the country, under its M&S brand. Until now they have only sold clothes and lingerie through their franchisee partner Planet Retail, which operates brands such as Dagenham’s, The Body Shop, Adidas, Guess and The Athlete's Foot in India. It has retail operations in 22 cities in India including Mangalore and others being Bangalore, Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Gurgaon, Noida, Pune, Nagpur, Kanpur, Lucknow, Chandigarh, Ludhiana, Jaipur, Indore, Ahmedabad, Surat and Guwahati.
Their present plan is to transfer these existing M&S outlets to the proposed joint venture company after it is formed. Elite Indian consumers have mostly preferred to buy M&S brands on their foreign sojourns as a matter of brand identity and prestige. In the words of M&S CEO Stuart Rose India presents an exciting long-term opportunity and a market where they have had trade relations for about six years. He informed “We are looking to accelerate the pace of growth in this fast developing economy over the next few years.”
Meanwhile with the Indian retail industry making progress by leaps and bounds, one finds many international names rushing in over the past 12 months. In the past foreign companies have often used the franchisee-model to introduce brands in India and test consumer preferences. But with the India growth story assuming an almost iconic status, the same brands now want to control the Indian operations themselves like M & S.