Wal-Mart could open 100s of stores if India rules ease
New Delhi, India Wal-Mart Stores could potentially open hundreds of stores in India if the country opens up the sector to foreign direct investment, the chief of its Indian joint venture told Reuters on Thursday.
India’s $450 billion retail sector is largely closed to foreign firms and favors small mom-and-pop stores, which provide livelihoods for hundreds of thousands and serve a market of more than 1 billion, said the report.
“If the laws of the country change to opening of FDI in retailing, we could open hundreds of stores,” Bharti Wal-Mart managing director and CEO Raj Jain said. “It is essential that FDI in retail opens up, because then we can open our own stores and carry the product in hygienic, safe conditions not only at the farm-gate but also right up to where the consumer buys from us.”
Earlier this month, the government took a tentative step toward opening up of the organized retail sector to foreign companies by putting out a discussion paper but steered clear of suggesting changes to the investment cap.
Currently there is a cap of 51% foreign direct investment in single-brand retail outlets, while retailers that carry multiple brands are restricted to cash-and-carry or wholesale outlets such as the ones Wal-Mart operates in India.
Bharti Wal-Mart operates wholesale stores in India under the Best Price Modern Wholesale brand, and has so far opened two stores. The joint venture expects to open 10-15 such stores over the next three years.
Separately, the number of retail stores operated by Bharti Retail would go up to 140 by the end of 2010, from the current 80, Jain said.
When asked by Reuters whether Wal-Mart would continue with the joint venture partner Bharti if the government relaxed foreign investment in retail, Jain said they would decide depending on what and how the laws would be.
Borders closes sale of Paperchase
ANN ARBOR, Mich. Borders Group announced it has closed on the previously announced transaction to sell Paperchase Products Limited to Primary Capital Limited, a U.K.-based private equity firm, for approximately $31 million USD.
On July 13, Borders announced it would sell Paperchase.Under the agreement, Borders Group said it will continue to purchase and carry products designed and sourced by Paperchase in its U.S. stores.
The company will receive proceeds of approximately $31 million (USD based on current exchange rates) upon closing, which is expected within the next week. The company is required to use $25 million of the proceeds to reduce the amount outstanding under its $90 million term loan credit facility. The completion of the sale is subject to customary closing conditions.
“We’re excited by the opportunity to build on the success of Paperchase, which is a well known design-led stationery brand in the United Kingdom, whose products have received great visibility through Borders stores in the United States,” said Graham Heddle, a director of primary Capital. “We look forward to working with the Paperchase team to build the business over the next few years.”
Borders Group acquired a majority interest in Paperchase in 2004.
Ebay’s revenue up in Q2
SAN JOSE, Calif. Ebay reported that revenue for the fiscal second quarter ended June 30, increased 6% to $2.2 billion, or 15% excluding Skype, compared with the same period of 2009. The company recorded second-quarter net income on a GAAP basis of $412.2 million, or 31 cents per diluted share, and non-GAAP net income of $530.2 million, or 40 cents per diluted share, representing an 18% increase excluding Skype, compared to the same period of 2009.
“We delivered strong second quarter results, demonstrating the global strength and increasing diversity of our business,” said John Donahoe, Ebay president and CEO. “PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of ecommerce. And our Ebay turnaround remains on track, with strong performance in Europe, significant changes in the United States and continued improvements to the buying and selling experience. We continue to focus on delivering strong financial results, managing a healthy balance sheet and making the necessary investments to compete, win and satisfy our customers.”