French retailer Auchan on Wednesday said it has dissolved an agreement by mutual consent with a unit of Dubai-based Landmark Group to operate hypermarkets in India.
Max Hypermarket India, part of the Dubai retail giant, and Auchan have decided to part ways as the two firms failed to convert their agreement into joint venture.
Max Hypermarket and Auchan had signed a licensing agreement in August 2012 under which Max Hypermarkets was to operate the Auchan Hypermarket chain in India.
The two partners had planned to roll out 80 stores in the country by 2015 including cities like Chennai, Indore, Vishakhapatnam, Bhopal and Chandigarh.
“Max Hypermarket and Groupe Auchan continued deep into 2013 to look into the possibilities of creating a joint-venture to facilitate Groupe Auchan investment in India, which could comply with Indian FDI (foreign direct investment) regulations. Despite their best efforts, the parties could not facilitate this proposition," Auchan said in a statement.
At present, Auchan operates 13 hypermarkets stores in Bangalore, Coimbatore, Gurgaon, Mangalore, Hyderabad, Delhi and Pune.
As a result, the 13 existing hypermarkets will no longer operate under the Auchan banner from January 2015.
This is second break-up for Max Hypermarkets after it ended its partnership with Dutch retailer Spar International in May 2012.
Landmark Group operates other retail brands like Splash, Lifestyle and Max, among others.
In September 2012, the Indina government permitted foreign direct investment up to 49 percent in multi brand retail, subject to mandatory local sourcing and approval of respective states.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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