Infiniti Retail, Tata Sons’ wholly owned subsidiary that runs Croma consumer electronic goods chain, has acquired Australian major Woolworths Wholesale’s Indian arm for around Rs200 crore.
The acquired company has been a supplier to Infiniti for six years.
Ajit Joshi, CEO of Infiniti Retail, said, “Once the deal is complete, we will merge Woolworths Wholesale India into Infiniti. We will also take their employees under our wing. With this buy, the total funding by Tata Sons in Infiniti has touched Rs700 crore.”
The acquisition gives Infiniti full control over its back-end operations.
The sale is part of Woolworths’ global restructuring plan.
Ramnik Narsey, chairman of its India unit, said. “With our decision to exit the consumer electronics specialty store sector in Australia and New Zealand, we have decided to sell the wholesale business in India to Infiniti.”
However, experts said there may be other reasons that may have brought about an end to this partnership.
“The partners had been bickering for a long time now and so this exit doesn’t come as a total surprise,” said an industry expert on the conditions of anonymity.
Analysts also believe that armed with the knowledge about the Indian market, Woolworths may consider looking at entering India in the different segment or the front-end at a later stage. Apart from consumer electronics, the company is also present in other categories such as food & grocery, liquor, petrol and general merchandise.
Analysts said with government opening up the retail sector for foreign direct investment many earlier joint ventures and deals between Indian and foreign players are set to change as foreign companies now have more options.
“Several companies had entered India at a time when there was no clarity on FDI and they were not willing to wait for long.
However, now with the changes in the policy we will see the relationships between companies changing,” said Harminder Sahni,, MD of retail consultancy firm, Wazir Advisors.
Devangshu Dutta CEO of retail consultancy firm Third Eyesight, said, “It is likely that in terms of single-brand retail the foreign partner may look at buying out their JV partners. Hectic activity in the retail segment in terms of new partnership and business formats is on the cards.”
Infiniti Retail currently operates 73 Croma and 12 Croma Zip stores in India.