As expected, Reliance Industries (RIL) and Britain's Marks & Spencer Group plc announced their joint venture on Friday, but what RIL stands to gain from the partnership remains to be seen.
Marks & Spencer is known for high quality clothes, home products and food.
Though RIL is already present in at least two of these three categories, it is not yet perceived as a retailer of premium and luxury goods.
RIL has agreed to be the minority partner in the company, called Marks & Spencer Reliance Retail India, by holding 49% stake.
The joint venture is expected to open at least 50 new stores across the country in the next five years.
Interestingly, Planet Retail, which is the existing franchisee in India for Marks & Spencer, would continue to operate the 14 stores it has.
Planet Retail is the same franchisee company which was earlier trying to get US coffee major Starbucks into India so that its continuation as a franchisee for Marks & Spencer leaves some questions unanswered.
Will the stores run by Planet Retail and those under the joint venture have separate product lines and price points?
There was no clarity from the partners on this.
The value of the initial investment into the joint venture will be up to £29 million or Rs 229 crore (in cash or in kind) between the parties, with both parties agreeing to provide further funding in the future.
The joint venture will have the right to operate Marks & Spencer stores in India selling items such as women's, men's and children's clothing as well as homewares.
The chief executive officer of Marks & Spencer Reliance India will be Mark Ashman while the chief financial officer will be Jatin Luthra.
Marks & Spencer is known for high quality clothes, home products and food.
Though RIL is already present in at least two of these three categories, it is not yet perceived as a retailer of premium and luxury goods.
RIL has agreed to be the minority partner in the company, called Marks & Spencer Reliance Retail India, by holding 49% stake.
The joint venture is expected to open at least 50 new stores across the country in the next five years.
Interestingly, Planet Retail, which is the existing franchisee in India for Marks & Spencer, would continue to operate the 14 stores it has.
Planet Retail is the same franchisee company which was earlier trying to get US coffee major Starbucks into India so that its continuation as a franchisee for Marks & Spencer leaves some questions unanswered.
Will the stores run by Planet Retail and those under the joint venture have separate product lines and price points?
There was no clarity from the partners on this.
The value of the initial investment into the joint venture will be up to £29 million or Rs 229 crore (in cash or in kind) between the parties, with both parties agreeing to provide further funding in the future.
The joint venture will have the right to operate Marks & Spencer stores in India selling items such as women's, men's and children's clothing as well as homewares.
The chief executive officer of Marks & Spencer Reliance India will be Mark Ashman while the chief financial officer will be Jatin Luthra.
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