Future Retail Shuts Down Big Bazaar As Reliance Plans Takeover
As Reliance plans takeover, debt-ridden Future Retail has shut down most of its Big Bazaar stores and also its website.
Going through an acute financial crisis, Future Retail has shut most of its Big Bazaar stores since February 25 (Friday), and even its website is down as it missed lease payments to Reliance Industries (RIL).
A source told Business Standard that Future Retail has not paid lease rentals to RIL and Reliance had extended working capital support, thanks to which Future Retail has been able to pay statutory dues, interest, one-time settlement to banks, and continue its business operations.
Reliance¡¯s Plan
Forbes India
In the next week, Reliance will open most of the 200 Future Retail stores as ¡®Reliance stores¡¯, and it is in the process of taking stock, re-branding, and transferring 30,000 Future Retail and Future Lifestyle employees onto the rolls of its manpower and staffing firm Reliance SMSL, as stated in Business Standard.
The first set of stores is expected to be opened as early as in the next two days.
Reliance has taken possession of those stores that were sub-leased to Future Retail, all of which are loss-making. The source also stated that the remaining stores will continue to be run by Future Retail. In this way, Future Retail¡¯s operating losses will be reduced.
Amidst all this, the Delhi High Court is hearing 4 cases in the fierce legal battle between Future Group and e-commerce major Amazon.
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What Future Group¡¯s Exchange Filing Says
In a stock exchange filing last Saturday, Future Retail said it received termination notices for a significant number of stores because of huge outstanding dues, and it would no longer have access to such store premises, as per Business Standard
In the exchange filing, Future Retail said that the company is scaling down its operations, which will help it in reducing losses in the coming months. It is proposing to expand its online and home delivery business, to increase its reach to the customers.
The debt-ridden Future group has over 1,700 stores across various brands, which include Big Bazaar, Fbb, and Central.
As per the exchange filing, Future group said ¡°The company has been finding it difficult to finance the working capital needs. Increasing losses at store level is a grave concern and is a vicious cycle where larger operations are leading to higher losses.¡±
Future group also said it has made a massive loss of ?4,445 crore in the last four quarters.
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