Retail News Update

BANGALORE: UK’s health and beauty giant Boots Company, now Alliance Boots, is returning to India. This time, Boots is expected to ally with Reliance Retail in the wellness business. Sources said Reliance was in fairly advanced talks to float a joint venture with Boots in which the former would keep a majority 51% stake.

The Indian retail juggernaut’s still emerging operations has identified certain business verticals where it would look for equity JVs for the requisite brand support, and wellness is one among them.

The development comes even as the domestic retail chain has rolled out Reliance Wellness stores in Hyderabad and is working on expanding the network to cover more markets. It plans to roll out over 300 wellness stores in three years. “This is market speculation and we have no comments at this stage,” a Reliance spokesperson said, when contacted.

This marks Boots’ return to Indian market after it exited a joint venture with Nicholas Piramal following the sale of its OTC medicines business to Reckitt Benckiser in 2005.

The still-at-works JV will help Reliance offer an array of activities from dispensing pharmacies to health and beauty services to healthcare check-ups under its wellness vertical.

The format currently offers products across categories such as allopathic, ayurvedic and homeopathic pharmaceuticals, personal care, beauty solutions and healthcare products. Reliance Wellness also has OTC health foods, self-help medical and fitness equipment in its portfolio. The wellness vertical at Reliance Retail is spearheaded by Ninu Khanna, who also looks after the company’s FMCG business.

Boots, UK’s biggest pharmacy chain, operates around 3,100 dispensing outlets worldwide.

Its current international operations are spread across Norway, Netherlands, Thailand and Switzerland. In UK, it also runs health and beauty destination stores across highstreets and edge-of-the-city centres. Interestingly, Boots also has a significant eye-care business apart from manufacturing and marketing health and consumer products under Boots, No 7 and Soltan brands.

Alliance Boots was formed through the merger of Boots Company with Alliance UniChem. However, a private equity consortium led by KKR acquired Alliance Boots earlier this year for around $22 billion. It was the first FTSE100 Index company to be acquired by private equity funds.

In this context, it may be mentioned that Reliance was earlier rumoured to be in talks with VisionCare for an alliance in the eye-care market. Meanwhile, it is believed that Reliance Retail’s equity JV strategy – with the company holding majority or at least 50% stake in each of them – will be restricted to certain sectors. Sources said key business verticals like hypermarket chain, consumer durable and fashion apparel will be fully-owned operations.