Team - Carrefour and Landmark fall apart

By siliconindia   |   Monday, 18 December 2006, 06:00 Hrs
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New Delhi: Talks between the world’s second-largest retail chain Carrefour and the Dubai-based Landmark group for an entry into the Indian retail sector are learnt to have fallen through.

Though the exact reason is not known, sources close to the development told ET that Carrefour may prefer to enter India in a partnership with an Indian company. An e-mail sent to Landmark CEO Micky Jagtiani did not elicit a response.

Carrefour, a French retail was in talks with Landmark to enter into India. According to sources, the French retailer is looking at various specialty retail formats, for which it may now tie up with multiple partners.

“Initially, the retailer will focus on convenient store formats in India. Carrefour’s entry into Indian retail mart will be in relatively smaller stores sized 2,500-3,000 square feet. Its entry into value and mass retail formats will come only at a later stage,” a source said.

Carrefour is said to be having discussion with a well-known Indian franchiser for apparel retail. Apart from this, the group may foray into grocery and consumer durables retail. It is also in talks with some real estate companies for a franchising agreement, possibly in the hypermarket segment. Worldwide, apart from hypermarkets, Carrefour operates in supermarket, hard discount and convenient store formats.

The company’s hypermarket chain comprises 1,000 stores globally, and makes up for almost 60 percent of the company’s total business. On the other hand, the convenient stores make for just about 17 percent.

The French retail chain is also exploring possibilities to enter via the 51 percent FDI in single-brand retailing route. This way, the company may look at retailing a product in the Indian market after extending a private label to it.

At present, Carrefour extends its private label brands to grocery, textile and home appliance segments. Whereas private labels offer much better margins to retailers, globally, most major chains, including Wal-Mart, Carrefour and Tesco, operate in the multi-brand format.

According to an industry expert: “The whole idea is to have many brands competing on the same shop floor. This gets more footfalls, eyeballs and cash falls
for the retailer.”

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