Wal-Mart chief visit to sew up retail foray

Wal-Mart Vice-Chairman Michael T Duke arrived in India late tonight with a team of executives for a two-day visit aimed at finalising the proposed retail foray with Bharti Enterprises. Bharti and Wal-Mart had signed a memorandum of understanding in November 2006.

Duke is scheduled to meet Bharti Enterprises Joint Managing Director Rajan Mittal and a team of Bharti executives at Mumbai tomorrow.

On Friday, Duke will visit Delhi and have a series of meetings with government functionaries, including Union Commerce Minister Kamal Nath, followed again by internal meetings with Bharti executives.

The visit is aimed at finalising the fineprint of the retail venture with Bharti. Once this is done, the agreements will be put up to the respective boards of the companies.

Sources indicated that the approvals at Bharti's end would happen in a few days. However, it is unlikely that a formal announcement would be made at this stage.

Earlier this week, Bharti Retail, a wholly owned subsidiary of Bharti Enterprises, announced its plans for front-end operations (stores), which will see investments of up to $2.5 billion by 2015. The agreement with Wal-Mart will focus on the back-end (logistics, sourcing and distribution).

Bharti Retail has said it will set up a nationwide retail chain. The company is planning to have 10 million square feet under various shopping formats. The investment will only cover front-end operations such as acquiring, leasing real estate and shop fittings.

The company is also planning to employ 60,000 people, Rajan Mittal, joint managing director, Bharti Enterprises, had said.

Bharti Retail is not planning to set up speciality stores for categories such as consumer electronics and apparels.

The company has identified three formats for its shopping outlets - hypermarkets (spread across 75,000-1.25 lakh square feet), supermarkets (30,000-50,000 square feet) and convenience stores (2,000-5,000 square feet).

The first of these stores will come up by early 2008. It is not yet clear whether the branding of the stores will include the Wal-Mart moniker.

Mittal had said government regulations permitted the use of Wal-Mart in branding. "We are currently conducting consumer research to determine the best strategy," he added.