Radical shift

Last fortnight, in a span of a few days, Mukesh Ambani did something the Reliance Group has never ever done before—the Chairman of the Reliance Group struck two joint ventures for his retail subsidiary, Reliance Retail.

Significantly, Reliance will have a minority stake in each of these ventures. First, Reliance Retail said it was joining hands with UK based Marks & Spencer for a JV where the foreign partner will hold 51 per cent. The venture, to be called Marks & Spencer Reliance India Private Limited, will be allowed to operate Marks & Spencer (M&S) stores in India and sell products like clothing and home ware. The initial plan, as specified in the press statement, is to have at least 50 new stores over the next five years.

According to a company release, “the value of the initial investment in the JV will be £29 million (Rs 232 crore).” Reliance Retail has been quick to forge another JV within the retail operations, this one with the Floridabased Office Depot. The JV will provide office products and services to business customers in India. Office Depot was founded in 1986 and is a publicly-listed company with revenues of approximately $15.5 billion (Rs 62,000 crore).

Globally, it is one of the largest sellers of office products like computers, computer software and office furniture. “We have partnered with Office Depot to provide a range of options for business customers,” says Bijou Kurien, President & CEO of Lifestyle for Reliance Retail. Reliance Retail and Office Depot also announced the acquisition of eOfficePlanet, a company that supplies office products and services to corporate customers in India.

— Krishna Gopalan