Global retail giant Wal-Mart today said it will have no problem if it does not get to use its moniker on retail store signages in India.
Vice-chairman Michael T Duke, who met reporters here today, pointed out that the company, which earns over $90 billion of annual revenues from international markets “operates under no fewer than 52 different brand names, of which only 25 per cent bear the Wal-Mart brand”.
Wal-Mart has a joint venture with Bharti Enterprises for a cash-and-carry(wholesale) venture in India. There are no regulatory restrictions on using the Wal-Mart brand in this business, but the company cannot have its brand name on front-end (retail level) stores that sell direct to consumers.
This is because while India allows 100 per cent foreign direct investment in wholesale cash-and-carry, it bars any foreign investment in retail that sells multiple brands and products (51 per cent is allowed in single-brand retail).
However, a foreign multi-brand retailer can strike franchise deals with an Indian company, allowing for its brand name on store fronts. Among existing examples of such arrangements is the UK-based retailer Debenhams, which operates a department store in Gurgaon.
Duke, who was flanked by Rajan Mittal, joint managing director, Bharti Enterprises, also asserted that the combine is on track to unveil its much anticipated retail and wholesale foray in April.
“We will unveil the plan for the roll out, the number of stores and the brand among other things at that time,” Mittal said. “We are close to finalising the brand and fleshing it out,” he added.
In all probability, the front-end retail stores, the first of which is slated to open in August, will possibly bear the Bharti Retail tag, while the larger cash-and-carry facilities (typically between 50,000 and 100,000 sq ft each and selling everything under the sun and feeding the retail front), will carry the Wal-Mart moniker.
The first cash-and-carry facility is slated to open by December (likely in Chandigarh). “Thereafter, we plan to open another two-three facilities in 2009,” said Raj Jain, president and CEO, Wal-Mart India. By 2015, the combine plans to have between 10 and 15 wholesale facilities across the country.
Duke’s latest visit to India comes at a time when organised retail, which accounts for barely 5 per cent of annual retail purchases of an estimated $280 billion, has witnessed mounting opposition from political and trade lobbies.