| UK Retailer Forms 51:49 JV With Indian Realty Co, | | | | in a retail business. Foreign investment is still not |
| Present Franchise Deal With Shoppers Stop To | | | | allowed in companies that sell more than one brand. |
| Coexist | | | | A JV in India traces Mothercare’s recent move in |
| Mother care, a UK retailer for kids and expectant | | | | China, which saw it breaking from its tradition of |
| mothers, is forming a 51:49 joint venture with | | | | growing overseas only by franchising to local |
| India’s largest real estate company DLF, two | | | | organisations. It has formed a joint venture with local |
| people close to the development said. | | | | partner Goodbaby in China. |
| While the company would continue its existing | | | | “We envisage that we may engage in more joint |
| franchise agreement with department store chain | | | | ventures in future, though we will remain mindful of |
| Shoppers Stop, it hopes that the new JV will give it | | | | political, cultural and economic risks which attend |
| greater control over its Indian operations and ability | | | | international investment,” chairman Ian R Peacock |
| to expand quickly in one of the fastest growing | | | | said in the latest annual report, talking about China |
| economies, they said requesting anonymity. | | | | joint venture. |
| Both DLF and Mothercare refused to confirm the | | | | The UK retailer, which has 1,014 stores in 50 |
| developments brushing it off as “market | | | | countries, including 609 stores outside the UK, sees |
| speculation”. | | | | the international market as “the biggest single |
| Mothercare spokeswoman Catriona McDermott said | | | | growth opportunity”, as per its annual report. |
| in a statement that the company was committed to | | | | Mothercare reported an International retail sales |
| its ongoing expansion in the Indian market. She said | | | | growth of 41%, as against 6.9% overall sales growth |
| the company has 21 stores in affiliation with | | | | for FY09 to £723 million. Similarly, international same |
| Shoppers Stop, which will remain a Mothercare | | | | store sales were up 6%, as against UK’s 1.4% |
| franchisee in India. | | | | for FY09. |
| “Shoppers Stop continues to be a valuable | | | | A joint venture with Mothercare further diversifies |
| partner in Mothercare’s ongoing Indian | | | | DLF’s portfolio of brands, which already has |
| strategy,” she said. | | | | Giorgio Armani, Dolce & Gabbana, Salvatore |
| The UK retailer had been in discussions with DLF and | | | | Ferragamao, Sunglass Hut and Sia Home. The realty |
| Tata group retailer Trent for a possible equity | | | | firm, which has been partnering foreign |
| partnership in India. | | | | retailers—usually as junior ally—aims to have a |
| In the past, many foreign retailers, who nurtured a | | | | stream of clients for its malls through these tie-ups. |
| long-term view on India, have shunned the franchise | | | | A typical standalone store of Mothercare in India is |
| route to form JVs with Indian partners. Last year, | | | | 3,000-6,000 sqft, while a shop-in-shop is 1,800-2,000 |
| UK’s largest apparel retailer Marks & | | | | sqft. The retailer offers a range of products, including |
| Spencer entered into a joint venture with Reliance | | | | clothing, hardware and toys in India for |
| Retail ending its franchise agreement with Planet | | | | mothers-to-be, infants and pre-school kids and |
| Retail. Indian laws make it compulsory for a foreign | | | | sources over 70% of products sold in the country |
| retailer selling a single brand to take on Indian partner | | | | from global vendors. |
| as the former can’t own more than 51% equity | | | | |