The entry of Star Bazaar, the Tata Group-owned supermarket chain, to the national capital is facing a hurdle with a division bench of the Delhi High Court issuing a stay order on the use of the Star Bazaar name by Tata’s retail company Trent for opening stores in Delhi.
The bench will meet again on January 7 to consider whether the stay would extend to other cities .
Trent has been in a legal tussle with a Delhi-based single-store retailer that operates under the same brand name in the city’s Kailash colony. Naveen Malhotra, owner of the store, said he had been using the brand name Star Bazaar since March 2003, much before Trent started using the name.
Malhotra approached the Delhi High Court in 2008 and obtained a stay order in November that year against the use of the brand name by Trent. After almost a year’s hearing, a single judge bench vacated the stay order on October 22 this year.
Malhotra made a fresh appeal before a division bench, which passed an order today staying the use of the name by Trent for opening stores in Delhi.
Malhotra said “The court has given me the permission to open stores in other cities under the Star Bazaar brand name, while it has stayed Trent from opening stores under the same brand name in Delhi.” Malhotra said he would open stores in other cities under the Star Bazaar name Asked about the stay order, Trent declined comment.
The company has five stores in Mumbai, Thane, Ahmedabad and Bangalore. Last year it signed an exclusive franchise agreement with UK-based retailer Tesco to access its technical capability including IT systems, cold chain infrastructure and front end services. Trent plans to open about 50 stores in around four years to strengthen its position in the supermarket format, but it was not clear how many it plans to launch in Delhi.
The high court order may create problems for the company and increase its branding costs. The company also operates garment retail stores under brand name Westside.
The Trent stock closed at Rs 626.65 on the Bombay Stock Exchange today, 5 per cent lower than the previous day’s closing.
Source: Business Standard
