MUMBAI/NEW
DELHI: Carrefour, Europe’s biggest retail chain, has agreed with Kishore
Biyani of Pantaloon Retail to set up franchisee stores in India after six years
of wandering in the world’s second-fastest growing nation for
partnerships, including with Mukesh Ambani’s Reliance Retail and real
estate group DLF.

The Paris-based retailer, which is seeing revenues
in its home country falling due to a tightening of spending by consumers, is
expected to sign on the dotted line by March, said an executive familiar with
the development.

When the deal with India’s retail king Biyani
is formally announced, Carrefour would be the third among the big names entering
the $390-billion Indian retail market after the Beast of Bentonville, Wal-Mart,
and UK’s Tesco.

Kishore Biyani, CEO of Future Group, declined
comment. Carrefour did not respond to an email from ET.

Carrefour,
Wal-Mart and other big retailers from the developed world are keen to have a
presence in India despite regulatory obstacles, hoping that the laws would be
eased as it happened in the telecom and other sectors. Also, the cleaning up of
excesses in the industry, after the exuberance of the past decade, is giving
hopes of a more saner approach to business. In the last downturn, many
retailers, including Reliance Retail, the AV Birla group’s More, which
went on a spree in setting up outlets had to shutter many of them and a
prominent name, Subhiksha, went bust. The losses continue for many, though it
has slowed.

The Carrefour franchisee is likely to be a part of the
Future Value Retail, a 100% unit of Pantaloon Retail, which owns hypermarket
chains Big Bazaar and Food Bazaar. The Big Bazaar, which has 109 stores,
contributes 65% of the Future Group’s $2-billion total revenues. Food
Bazaar, a supermarket chain has 152 stores.

Carrefour has two
entities in India — Carrefour WC & C India and Carrefour India Master
Franchise Company.

Although the franchisee stores may be dealing with
similar products as some of Mr Biyani’s existing outlets, it would serve
the affluent upper middle-income and rich customers who don’t look for
economy or hesitate to pay more for the experience of shopping in a luxurious
atmosphere.

This would pit the Carrefour-Biyani combination against
the Raheja group’s HyperCity that sells expensive products such as
imported wine and whiskey.

Thierry Garnier, executive director in
charge of international partnerships at Carrefour, is leading the negotiation
with Kishore Biyani’s son and Future Group director Rakesh Biyani, the
official said. Sameer Sain, CEO of Future Capital Holdings and a former Goldman
Sachs banker, is helping Biyanis close the deal.