New Delhi: The retail unit of India’s largest conglomerate, Reliance Industries Ltd, is planning to roll out stand-alone stores for stationery products over the next two years as the country’s 9% economic growth creates greater opportunities for the office-supply business.
“Stationery is a part of our lifestyle business plans,” said Bijou Kurien, president and chief executive officer for lifestyle at Reliance Retail. “We are looking at creating stand-alone stores for stationery.”
Reliance Retail has already held talks with US-based Office Depot Inc. for its stationery business, according to a person familiar with the situation.
A team from Reliance Retail recently visited the US to talk about a possible wholesale joint venture with Office Depot, said this person, who did not want to be named, adding that Reliance Retail plans to open 250 stand-alone stationery stores nationwide by 2010, in addition to a stationery wholesale venture.
Kurien wouldn’t confirm or deny the talks with Office Depot. “We are talking with several potential partners across the world for various partnerships, but the strict confidentiality agreement we signed with the companies does not permit us to talk on our prospective relationships.”
Kurien said Reliance’s plans for the stationery business are still in the “evaluation process” and “no number (of stores) has been firmed up.”
A spokesman for Office Depot said while the company was looking at India to “profitably grow” its business, as a matter of policy, it doesn’t comment on specific plans.
India is believed to represent a $10 billion annual office-supply market. Earlier this year, the country’s largest listed retailer and a rival to Reliance, Pantaloon Retail (India) Ltd, and US-based Staples Inc. entered into a 50-50 joint venture to sell office-supply products as a wholesaler to other businesses.
“As Staples expands globally, India represents a great opportunity for the company,” said Ron Sargent, Staples chairman and chief executive officer at that time.
In retail, cash-and-carry, or wholesale to businesses, is one of the few areas where overseas investors can fully own and operate stores.
Investments from foreign investors in retail outlets that sell to non-business customers, however, come with a slew of restrictions.
New York Stock Exchange-listed Office Depot, one of the world’s largest office-supply companies, with an annual revenue of $15 billion, sells its products through more than 1,500 stores in 42 countries including France, Japan, Hungary, Israel, Thailand and South Korea.
“Our next focus has got to be India,” said Office Depot’s chairman and chief executive Steve Odland in an interview with CNBC earlier this month.