News: Reliance may bring The Home Depot, Target into India

(FE 08/06/2006) Mumbai - The Mukesh Ambani-controlled Reliance Group, which is giving shape to a major Rs 40,000-crore retail sector game plan, is likely to be the sole India franchisee for reputed international retail brands. Two names being mentioned in this context are those of US retail majors Target ($52 billion in revenue in 2005) and The Home Depot, a $81.5-billion company (2005 sales) with earnings of $5.8 billion in 2005.

Reliance might even consider the option of buying into Target, sources said. Reliance executives declined to comment on the issue.

Sources said Reliance was exploring the possibilities of bringing foreign retail brands into India. This will not only add muscle to its own retail game plan, but also bring in major gains in terms of its supply chain management plans.

Reliance may also consider similar acquisitions or alliances domestically. “We may bring in these brands into India and also have our own Fresh Plus line of products in such stores,” the sources said.

The Fresh Plus brand constitutes the ‘farm-to-fork’ initiative of Reliance Retail, and involves a strategy to source products from farmers by cutting out middlemen.

As part of its retail rollout plan, Reliance has already hired a number of retail industry heavyweights to head various verticals. Gunender Kapoor, formerly of Unilever, has been brought in to head the food and groceries initiative, Ninu Khanna (formerly Bombay Dyeing and Dabur) will head FMCG, and Sriram Srinivasan (formerly of Indus League) will spearhead the lifestyle and apparel initiative.

By 2010, Reliance expects to directly employ about 500,000 people for its retail foray.