UK retail major Argos set to enter India
Monday, 26 February 2007, 18:30 IST
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London: British retail major Argos has announced plans to enter India later this year after signing a franchise agreement with a joint venture company owned by Shopper's Stop and Hypercity Retail India. The stores, named Hypercity-Argos, are expected to open initially in the Mumbai region. Argos is the latest of several western retail companies eyeing the large Indian market. Its plans for India include providing its brand, catalogue, IT support and expertise in linking high street and home shopping. Wal-Mart recently signed a deal with Indian firm Bharti Enterprises and is expected to spend $2.5 billion (1.3 billion pounds) on developing a chain in India. Another retail major, Tesco, is also rumoured to be in talks with the Tata Group on forming a partnership to enter India. A Tesco spokesman said: "We are interested in India and are researching the market." Terry Duddy, chief executive of Home Retail Group (HRG) that owns Argos, told newspersons: "The heads of terms with Shopper's Stop and Hypercity, both pioneers in the Indian retail market, give Argos an initial foothold in what is a rapidly expanding market." The first of the stores is expected to open in Mumbai towards the end of the year and will be based on the Argos catalogue model. The financial terms of the deal were not disclosed. Duddy said HRG had settled on India after ruling out Eastern Europe and China because of the potential it offered. "It is exciting because strategically it will help us answer the question of what could happen to Argos in emerging markets." HRG will invest about 10 million pounds to establish an Indian business, which will be called HyperCity-Argos. It will not get any revenues for the first two years but will move to a revenue-sharing agreement in late 2009 if the move has been deemed a success.
Source: IANS