UK Retailers End Talks With Reliance Retail, Trent
Wednesday, 21 October 2009 10:03
As market challenges abound on their home turf, British retail majors HMV and Arcadia Group are pulling back from debuting on Indian high streets. A fortnight back, entertainment retail behemoth HMV Group bailed out of talks with Mukesh Ambani-led Reliance Retail for an equal joint venture in the Indian market, sources with direct knowledge of the development said. UK-based billionaire Philip Green’s fashion empire, Arcadia, has postponed bringing in high-fashion women’s clothing chain Topshop through Trent Ltd, a Tata Group entity.
HMV and Topshop are backing-off following similar moves by UK-based healthcare retailer Boots Plc, which was also in discussions with Reliance Retail till early this year. HMV and Reliance TimeOut, a lifestyle and leisure division of Reliance Retail have been in talks to launch book store chain Waterstone’s and music retail stores under the HMV brand separately.
The folding up of competitor and one of UK’s largest music-to-games retailers Zavvi—on the back of the collapse of its supplier Entertainment UK—may have been music to HMV’s ears but its subsequent purchase of 14 Zavvi stores across UK and Ireland seems to biting into HMV’s overseas strategy.
“HMV felt the time was not right to invest significant management time and resources in developing an India strategy. But Reliance will be the first option as and when HMV renews India plans,” a source, who did not wish to be identified, said.
Reliance Retail was unwilling to comment, while HMV Group’s director of corporate communications Paul Barker declined to respond to market rumors.
Sluggish sentiments in established markets are cramping several international retailers’ plans of tapping into one of the fastest-growing retail markets in the world, just yet. Premium retailer Arcadia Group—which has fashion brands Topshop, Burton, Dorothy Perkins and Ms Selfridges in its portfolio—was expected to bring Topshop into India through Trent.
Tata Group’s retail arm had blocked three store locations in Mumbai and Delhi for Topshop, which was released in recent weeks stating that plans to launch the international fashion clothing chain, has been postponed.
Topshop, which saw popularity surge over style icon Kate Moss’s design collaboration, operates in over 20 countries, but India was seen as next big destination when discussions firmed up with Trent last year. While ET was unable to elicit a response from the Arcadia Group, Trent which operates lifestyle department chain Westside declined to comment.
While India’s robust consumption story continues to attract global retailers, there are concerns over the still high real estate cost, lower sales density and a rather small market for organized womenswear retail. Bulk of the domestic womenswear market remains in the traditional realm of retail with organized retail players making slow progress.
