Foreign retail chains wooing Subhiksha?

Whether it is scorching pace of growth, expansion in clusters, or talk of takeover, Subhiksha always remains in the news! This time, it is about foreign retailers wooing this Chennai-based, decade old, retail chain, with 500 plus stores across the country, for a possible pan-India tie-up.


All big retailers, who enjoy the advantage of having moved into organised retail in early days, are prime takeover or partnership candidates. Trinethra and Adani supermarket chains, it may be recalled, were recently bought over by Birlas and Ambanis from their respective owners.

If an Economic Times story based on market gossip (22nd January, 2007), is to be believed, R Subramanian promoted, Subhiksha, is being hotly pursued by foreign retail chains with partnership proposals. According to the story, existing chains are not content with investments alone from their suitors, but they also want a fair share of the cake by demanding an equal partnership in the business particularly when the way has been paved by none other than the world’s biggest Wal-Mart.

Government policies also favour this as the policy makers, despite strident protests from the left, have found nothing wrong with the recently concluded Bharti’s alliance with Wal-Mart.

Foreign retail chains may also not be unwilling to share a part of control and profits with home grown retailers, who beside bringing low cost infrastructure on the table, offer much needed understanding of the local geography and customer in a market which is not only multi-ethnic and multi-lingual, but also continent like in size.

No wonder, even Wal-Mart, despite its financial and technological might, had to recently wthdraw from South Korea and Germany.


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