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| Marks & Spencer drops prices to boost sales |
| Neeraj Thakur / New Delhi Apr 18, 2009, 00:44 IST |
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Marks & Spencer Reliance India (MSRI) has lowered the prices of its cheapest products by 20 per cent by stepping up its sourcing from Indian manufacturers, in a bid to retain customers who are moving away to competitive products.
A Polo Shirt is now available for Rs 395, compared with Rs 495 earlier, while the formal shirt will now be available for Rs 695, compared with Rs 795 earlier,’’ said Mark Ashman CEO, Marks & Spencer Reliance India.
“During the ongoing recession, the entry price of the products matters and that is why a part of the margin saved through increased sourcing from India would be passed on to the customers,” said Ashman.
MSRI is a 51:49 joint venture between British department store chain Marks and Spencer Group Plc and Mukesh Ambani-Promoted Reliance Retail Ltd. Marks & Spencer previously had 14 stores in India under a franchisee agreement with Planet Retail. This agreement ran for six years, but wasn’t very successful. One reason was the high pricing of products, as the company used to pay high duties on imports from the UK.
M&S ended the agreement last year and went ahead with the Reliance retail joint venture. The JV was announced last year, with a stated intention of investing £29 million over five years to open 50 stores.
The earlier 14 stores continue under the new set-up; in addition, the first store to be opened under the new agreement began today in Mumbai. A store each is also to be opened in Delhi, Hyderabad, Chennai and Bangalore, in the current fiscal.
The firm expects to increase its margins by aiming at sourcing 70 per cent of its merchandise from Indian manufacturers as compared with 20 per cent earlier.
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