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Purvita Chatterjee

Mumbai, Aug 11 Building scale into its sourcing operations from India, Marks & Spencer Reliance India proposes to source up to 70 per cent of its apparel indigenously.

The newly formed 51: 49 joint venture between the UK-based Marks & Spencer and Reliance Retail, has recently set up a second sourcing outfit in Bangalore to specifically cater to the Indian market.

Speaking to Business Line, Mr Mark Ashman, Chief Executive Officer, Marks & Spencer Reliance India said, “In the past 18 months we have set up a new sourcing office in Bangalore, which would make apparel specifically for sale in India. Going forward, 70 per cent of the volumes of what we sell at our stores will be made in India.”

Considering that apparel attracts steep import duties of nearly 38 per cent, the UK-based retailer is planning to bring down its percentage of imported apparel and reduce price to make itself a ‘mid-market’ retail brand as it is in the UK market.

“In the UK market we are not the most expensive nor the cheapest but a mid-market brand. Our garments will now get priced on par with the UK market,” said Mr Ashman. In fact, in the past six years when Marks & Spencer existed as a franchise partner with Planet Retail, its garments were priced at a 25 per cent premium to the UK market. More recently its franchise did manage to lower it to 15 per cent of its UK pricing but the retailer has continued to be perceived as a ‘steeply’ priced apparel brand in the country.

“Our first priority today is to bring down prices to get on par with the UK market. Going forward we will continue to try and lower prices for the Indian market,” said Mr Ashman.

With plans of adding 50 new large format (15,000-20,000 sq ft) stores in the next five years, Marks & Spencer would be adding new categories such as children’s clothing and furnishing.

Besides, as and when it obtains FIPB (Foreign Investment Promotion Board) approval to enter the foods category, it would bring in items with longer shelf life — such as biscuits, cereals and beverages.

There is also a possibility of opening branded cafes (Café Revive), which currently exist at its UK stores. Considering there are separate food outlets under ‘Simply Food’ in the UK, in India its foods category would be clubbed together with its apparel and exist within the premises of its company-owned stores. Food and apparel contribute almost equal revenues for Marks & Spencer in the UK.

The UK retail major believes that the current slowdown is unlikely to affect its future plans. As Mr Ashman says, “We are comfortable with our plans and the slowdown has not affected us. Marks & Spencer intends being a major player here, both in the short and long term.”

More Stories on : Strategy | Readymade Garments | Retailing

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