Meghna Maiti, Financial Chronicle
Mumbai, 13 August 2012
Max Hypermarket India, part of the Dubai-based retailer Landmark group, has signed a franchisee agreement with French retailer Auchan group to develop the hypermarket business in India. The existing Max Hypermarket stores will be rebranded as Auchan, and the stores will operate under the franchise agreement.
Max, which is run by Landmark group, operates 13 hypermarkets in India. These stores will be rebranded in the fourth quarter of the current financial year. Max and Auchan plan to open 12-15 new stores annually across India, they said in a joint statement.
Viney Singh, managing director of Max Hypermarket, told Financial Chronicle that the deal would help the company strengthen its backend supply chain and processes. While the company has invested Rs 450 crore in the business, it is looking to invest around Rs 500 crore over the next three years, Singh said. “The synergies could be in every sustainable area. Auchan’s expertise in managing hypermarkets and our understanding of the Indian market will ensure we bring the best of value, choice and experience to our customers,” added Singh.
Saloni Nangia, senior vice-president at retail consulting division of Technopak, said, “At a time when economy is really slow, such partnerships would go a long way in boosting confidence.”
“Auchan is one of the largest retail groups in the world. This move indicates a commitment of the Auchan brand to the Indian market. In case FDI in retail comes through, the French major may directly invest into Max,” said Devangshu Dutta, head of consulting firm, Third Eyesight.
Philippe Baroukh, GM of Hypermarkets at Auchan group said that the new franchise partnership is a great opportunity for Auchan to enhance its brand in a high potential market.
“The Landmark group has aggressive growth plans for India, across various verticals, and we believe that Auchan are the right franchise partners for us, as we continue to set benchmarks in Indian retailing,” said Ramanathan Hariharan, director of Landmark group in a press statement.