New Delhi: The country’s largest retailer by market value, Pantaloon Retail (India) Ltd, has formed a 50:50 joint venture (JV) with men’s men’s casual-wear company Celio SA to open the French firm’s branded stores in India.
The JV is expected to seek approval?in?the?coming?months from India’s Foreign Investment Promotion Board that clears overseas investments, a person directly involved in the agreement said. He did not want to be quoted ahead of a formal announcement.
Though Indian regulations bar multiple product retailers such as Wal-Mart Stores Inc. from selling to consumers, they allow up to 51% overseas ownership in ventures selling products under a single brand name such as Marks and Spencer (M&S) or Nike.
As India’s middle class swells, overseas brands are hoping to get them to spend on more branded products.
The person involved in the agreement, however, declined to say how much the JV is expected to invest in rolling out Celio branded stores in the country.
A Celio spokesperson in Paris said the company plans to open stores in India soon, but did not divulge any details. Paris-based Celio sells its products in almost two dozen countries from Italy to Israel.
Rakesh Biyani, chief executive of the retail business for Pantaloon’s parent Future Group, said the firm is in talks with several foreign fashion garments and accessories brands that he declined to na-me, and said it plans to bring at least five brands into the country between the second quarter of this year and 2009.
Biyani said the partnerships could be either JVs or franchise deals.
Apparel and accessories account for the largest chunk of India’s modern retailing business — almost 39% of the country’s annual $12 billion (Rs48,000 crore) organized retail market. Foreign brands, including M&S, Benetton, Guess, Levi’s and Gas among others, are sold in India through stand-alone stores.