Debenhams looks to India and Russia for expansion

London, May 27 : UK retailer Debenhams is set for major expansion in the high-growth Indian and Russian markets.

The department store's 43 international outlets, which are operated by franchise partners, are on track to hit the 280 million pound sales target for the financial year to August. Debenhams wants the sales to be at the 600 million pound mark from 90 department stores by 2012, The Independent quoted Francis McAuley, the company's international director, as saying.

Debenhams also has ambitious plans of investing in Mainland China, Pakistan, Brazil and Canada. But the focus in the near future will be India and Russia, alongside central and southern European countries such as Greece and Poland, and the Baltics.

The company opened its first Indian store in October 2007 in Delhi's Gurgaon district, with partner Planet Retail. Another two shops are due to open in the city before the end of the year, followed by significant acceleration over the coming decade.

"I would be disappointed if we do not have 30 stores in India in 10 years' time and that is proper department stores. The Indian market has a real appetite for Western brands and the education and understanding of the young people is second to none," said McAuley.

India has one of the fastest-growing consumer markets in the world and its middle class is expected to balloon to 350 million people by 2015.

Debenhams is targeting the country's upper and middle- class shoppers. Its biggest-selling own brands in India are Red Herring and Maine New England.

The Designers at Debenhams ranges, such as Jasper Conran and Rocha, are also popular. However, the poor condition of the transport infrastructure is a potentially major hurdle.

Russia is the group's other major growth target. Debenhams is in "serious negotiations" with a potential partner and the company hopes the talks will be concluded by September with a view to opening a first Russian store in September 2009.

Debenhams is not the only major UK retailer to be focusing on international growth, particularly in emerging markets.

Marks and Spencer is also looking hard at India. In April, it announced a joint venture with Reliance Industries, the country's biggest company, with plans to open 50 stores on the sub-continent over the next five years.

The deal is central to the target set by Sir Stuart Rose, the company's CEO, to take between 15 and 20 per cent of the company's sales from international stores.

ANI