India's Reliance to take over operations of 250 more Future Retail stores-sources

Future Enterprises

28/02/2022 07:12

By Aditya Kalra
    NEW DELHI, Feb 28 (Reuters) - India's top retailer,
Reliance, will add 250 more Future Retail  FRTL.NS  stores to
its portfolio after the company failed to make lease payments
for the outlets to Reliance, two people with direct knowledge of
the matter told Reuters on Monday.
    The plans - which sources said will be executed within weeks
- come after Reliance took possession of and started rebranding
about 200 of Future's Big Bazaar supermarkets over the weekend,
and is set to further hollow out Future, which has been at the
centre of a pitched battle between Reliance and Amazon.com Inc
 AMZN.O .  urn:newsml:reuters.com:*:nL1N2V10C1
    The move over the weekend led to suspension in online and
offline supermarket operations for Future, the country's second
largest brick-and-mortar retailer.  urn:newsml:reuters.com:*:nL1N2V209G
    Reliance's move assumes significance as it follows failed
efforts since 2020 to close a $3.4 billion deal to acquire the
retail assets of Future.
    Future's partner Amazon has blocked the transaction by
citing violation of contracts. Future denies any wrongdoing, but
a Singapore arbitrator and Indian courts have backed Amazon's
stand so far.
    Amazon is likely to challenge Future's move of store
transfers in Indian courts, a third source told Reuters. 
    Future, Amazon and Reliance did not respond to requests for
comment. Future told stock exchanges on Saturday the company was
 "going through an acute financial crisis" and "scaling down its
operations" to reduce losses.
    Over the months, Reliance had transferred leases of some
stores of the debt-laden Future to its name and sublet them to
Future. It is now taking possession of the stores as Future did
not make lease payments, sources have told Reuters.
    After taking control of 200 of Future's flagship Big Bazaar
stores, Reliance now has plans to take over another 250 stores
in coming weeks and rebrand them as Reliance outlets, said the
sources, who declined to be named as the plan is not public. 
    One of the sources said this could include Future's apparel
outlets "Central" and "Brand Factory". 
    With the latest move, Reliance will effectively take over
operations of roughly a third of Future's 1,500 outlets in
India. 
    Despite the store transfers, Reliance has told Future, it
will not change the terms of their 2020 proposed deal, said one
of the sources.

 (Reporting by Aditya Kalra in New Delhi; Editing by Raju
Gopalakrishnan)
 ((aditya.kalra@tr.com; +91-11-49548021; Twitter @adityakalra;))