What is future retail?
Future retail is one of the biggest multi-industry companies which was founded in the year 1987 in the name of Manz Wears Private Ltd. The company launched its first brand as Pantaloons which was India’s first trouser brand. The company has been founded by Mr. Kishore Biyani, who is the founder and currently group CEO of Future retail group. The Managing Director of the company is Rakesh Biyani while the Chief Executive Officer is Mr. Sadashiv Nayak.
The company changed its name in the year 1991 to Pantaloons Fashion (India) Limited and the company launched its own denim brand named BARE. The company in the following year came into the market with its IPO (Initial Public Offer). The company in the year 2001 launched one of the first Pantaloons stores in Kolkata, Bangalore, and Hyderabad. In 2002, it launched its supermarket chain named Food Bazaar.
In 2003, the company launched its stores in Nagpur of Big Bazaar. In 2005, the company launched its unique shopping program Big Bazaar Exchange Offer, inviting households to exchange their junk and in exchange get coupons that provide discounts in shopping the new products from them.
In 2007, the company reached the opening of its 50th store in Kanpur, partnered with Futurebazaar.com to launch India’s most popular shopping portal. In the next itself, the company doubled its stores reach, as the company reached the mark of 100 stores across the country, making it one of the fastest expansions in hypermarket format anywhere in the world. In 2010, Pantaloons opened its 50th flagship store in New Delhi.
Future Retail "Naye India ka bazaar"
In 2011, Big Bazaar completed its 10 years in the market. This time, the company came with a new brand identity and tagline “Naye India ka bazaar”. In 2012, Pantaloons joined its hands with Payback, as it’s India’s largest and has one of the strongest loyalty programs in Europe. Pantaloons offers were made available to all the Pantaloons customers of the company.
In the next year itself, the hypermarket launched “April Utsav” which is an exciting occasion for shopping for its customers. In 2014, Future Retail Group partnered with Amazon, which is a Fortune 500 company in the world and also one of the largest online shopping destinations. In 2016, the company got in association with Bajaj Finserv to launch India’s first retail EMI card.
The current market price of the company is 48.90 points. The share price has fallen twice in the past 5 working days while it has risen thrice. The share price of the company has fallen of 0.71% of its last value in the past week while it has gained in a month of about 1.04% and if an investor seeks for long term like 3 years, the share price of the company has fallen 89.15%, from the previous price before the beginning of lockdown.
The standalone financials of the company are (Rs. Crores)-
Future Retail- Revenue and Profits
The company in the past few years has been earning good revenue and profits over the years. The revenue of the company has decreased from 2019 to 2020 by Rs. 46 crores which are about 0.22% less as compared to 2019 and in the year 2021. It saw a huge decrease in its revenue as compared to 2020 by Rs. 13,857 Crores which is 68.87% but in the terms of percentage increase of revenue of the company, it is lower in 2021 as compared to 2020.
As far as the net profits of the company are concerned, the net profits have decreased in 2020 from 2019 by Rs. 699 crores which are 96.41% less than 2019, and in 2021 the net profits of the company went into the losses by Rs. (3,147) crores which are 9,536.36% lower than 2020.
The company had got a huge decrease in the profits over the last 2 years, as the company has now started facing losses, which is a for the company, as there have been losses due to the shutting down of stores due to covid situation across the nation and the company had been into legal matters regarding the takeover.
The situation which is regarding the fight is between the two major companies, which are Amazon and Reliance, as both the companies want to take over the company’s hypermarket “Big Bazaar”. This fight started between the two companies in the year 2020, as Future Retail was running out of money and also had a huge amount of debt.
This was the time, when Reliance came into the picture, as the company was expanding, it decided to take over the company and was offering Rs. 25,000 Crores for its assets and promised to keep its 30,000 employees on its payroll. But when the time came to finalize the deal, Amazon intervened as it was the holder of the company as it had acquired 10% of Future Retail for a price of Rs. 1,400 Crores. Amazon interfered in this sale, as it had made the earlier deal with the company only on the option that it will have special rights to assets held by Future Retail Group.
Future Retail- Internet giant approach
As soon as this happened, the Internet Giant approached Singapore International Arbitration Centre (SIAC) for an Emergency Arbitrator and the arbitrator ruled in favor of Amazon. In the order, they granted interim relief to Amazon and also forbade the Future Retail Group from completing the transaction with Reliance. The case has been going in from Delhi HC single bench to division bench, the NCLT is also at play and the Supreme Court of the country as well.
In December 2021, CCI heard the plea and suspended the deal made by Amazon with Future Retail Coupons in 2019, and also imposed a penalty of Rs. 202 crores. In February, the Supreme Court overturned a single-judge bench of the Delhi High Court’s decision to take harsh measures against Future Group, as well as an order refusing to stay the Singapore tribunal’s rejection to rescind the emergency award.
The matter was sent to the Delhi High Court by the Supreme Court. The NCLT recently heard the plea on 25th February 2022 from the side of Amazon, as they have seek an interim stay on the order imposed by CCI.
Recently, the workers of JIO have been seen shifting their items into the stores of Big Bazaar, as Future Retail Group is also facing more losses due to the unavailability of the shops working. However, it appears that everyone has had enough of this farce.
According to reports, both Amazon and Reliance are now eager to get down and work out their disagreements. The Supreme Court, in fact, has extended a deadline.
They expect everyone to find a solution by March 15th. Because if they don’t, everyone loses: employers, shareholders, and the 27 banks that have already made preparations for non-payment of dues totaling 9,000 crores.