Kishore Biyani the founder of Future Group said today owing to the pandemic the company has lost nearly Rs 7,000 crore revenue in first three-four months of the COVID-19 pandemic due to closing of stores, and leads to selling his business to Reliance industries. In August, Ambani announced his acquisition of retail and wholesale business and the logistics and warehousing business from the Future Group for INR 24,713 crore.
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Kiyani said the problem is rent doesn't stop; interest (on debt) doesn't stop, as the major reason for the loss. He said in the last six-seven years the future group did too many acquisitions but now there was no other answer but to exit. He added in a period of 5-10 years if a retailer achieves 70-80 per cent of the targets set while designing a profitable business is not an easy thing for physical stores. On regulatory approval the Ambanis will acquire Future Retail that owns all-in-one BigBazaar that sells everything from groceries to cosmetics and apparel, and Future Lifestyle Fashions Ltd that operates fashion discount chain Brand Factory and Future Consumer, which sells food, home and personal care products. Future Group's financial and insurance business is not part of the deal.
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The great Future Retail operates 1,550 stores. Its flagship brands include BigBazaar, FBB and Foodhall, Easyday, Heritage Fresh and WHSmith. Future Lifestyle Fashion operates 354 stores. The Seattle based e-commerce giant Amazon has issued a legal notice on Future Group, alleging that the retailer's Rs 24,713 crore asset sale to Reliance Industries violated an agreement with the e-commerce giant. Amazon last year bought a 49 per cent stake in one of Future's unlisted firms, Future Coupons Ltd, with the right to buy into flagship Future Retail after a period between 3 and 10 years. Future Coupons owns a 7.3 per cent stake in Future Retail.