Reliance Retail has begun the process of taking over the premises where Future Retail operates its stores, including Big Bazaar. Reliance Industries (RIL) is replacing these stores with its brand stores and is bringing the Future Retail employees on to Reliance Retail’s payroll.
Future Retail, the group led by Kishore Biyani, is trying to scale down operations to bring down losses. It has been battling with partner Amazon over selling its business to the retail arm of RIL.
Future Retail has been struggling even to pay the rent for the various premises. After the deal was announced in August 2020, several landlords approached Reliance as Future Retail was unable to pay the rent.
Reliance then entered into lease agreements with the landlords of these rented properties and managed to sublease the same to Future Retail to ensure business continuity.
The stores being taken over by Reliance are the ones running in losses. The remaining will continue to be run by Future Retail. This move will help Future Retial reduce its operating losses and run as a going concern. Reliance will assess and use the Future retail stores that appear commercially viable. It will, therefore, also re-employ almost 30,000 store employee, who were facing the risk of being rendered jobless.
Though the Future Group had announced a deal with Reliance Retail Ventures (RRVL) — worth over Rs 24,500 crore — for the sale of the retail and wholesale business, and the logistics and warehousing verticals, partner Amazon had been against it.
Following this announcement, Amazon had taken the Future Group to the Singapore International Arbitration Centre (SIAC) back in 2020. The case is pending in other forums as well, including the Supreme Court, Delhi High Court and the National Company Law Tribunal (NCLT). Some legal clearances are still pending for RRVL.
About 19 companies of the Future Group from the retail, logistics, warehousing and wholesale space will be brought together under Future Enterprises (FEL), which will be the transferee company to Reliance Retail, before being transferred to RIL.