Reliance Retail partnering Marks & Spencer - compulsion for both

The British iconic retail giant, Marks & Spencer which has been operating in India since 2001, is going for a makeover in a bid to widen its portfolio in India to include its food and cafe business.

Currently, M&S operates 20 stores in India selling apparel through a JV with Planet Retail. It was primarily positioned a luxury retailer, though recently it has reduced its prices to increase revenues.

According to ET, Reliance Retail and M&S is likely to have an equal JV and would retail apparel and food through existing Reliance Fresh stores that are located in upmarket locations.

Earlier M&S was in talks with Aditya Birla Retail, Mahindras, Tata’s Trent and Lodha & Co. for a JV.

Through this JV, Reliance Retail gains as it gets to build its retail business through JV. It would also help in getting a new look for Reliance Fresh and Reliance Trends. Also, it helps in allaying concerns over Reliance Fresh expansion as it could then position it for consumers in higher income strata and at least portray itself as not affecting small retailers.

On the other hand, M&S get its hold in food business in India and would get a partner which has the most aggressive retail plans for India. It also gets to diversity itself from the saturated European markets, and scale up its business in emerging economies like India.