Monday, 16 February 2009

Eastern Opportunities

Fashionista notes with interest the growing trend for retailers to turn to emerging markets whilst trading conditions in the UK continue to be troublesome. As reported in Retail Week, Inditex has signed a deal to open stores in India in 2010. Local law prevents foreign holdings of more than 51 per cent in single brand retail, so Inditex has formed a joint venture partnership with Tata Group to open Zara stores in cities including New Delhi and Mumbai. Inditex will control 51 per cent of the venture, while Trent, a Tata Group company, will control the remaining 49 per cent.

Whilst this means that Inditex will have to share the upside, it also clearly provides an opportunity to mitigate any risk. Fashionista notes that whilst her man on the ground in Mumbai has greeted the news of Zara's impending arrival with polite interest, his wife is positively delighted!