The Future stores will be rebranded by Reliance Industries Limited after the company failed to make payments for them.
Future Retail Limited, India’s second-largest retailer, halted most of its online and offline operations on Sunday, with shops remaining closed after competitor Reliance attempted to take over its flagship supermarkets for unpaid lease payments.
According to Reuters, Reliance Industries Limited would rename the Future shops after the firm failed to make payments to Reliance for them, shutting most branches of the popular Big Bazaar chain. Despite the fact that Future has over 1,700 stores, all 200 stores that Reliance will rename as its own will be Big Bazaars, which was founded roughly two decades ago by Kishore Biyani, called India’s retail king for changing the industry.
Requests for comment from Future and Reliance were not returned. On Saturday, Future informed stock markets that it was “scaling down its operations.” According to those acquainted with the preparations, Future’s outlets throughout India stayed closed while Reliance undertook stock-taking ahead of a rebranding. “We regret to inform you that currently stores are non-operational for 2 days,” Big Bazaar said in response to a Twitter user who complained about the shutdown.
Future’s e-commerce mobile app and website were also inaccessible for online orders. Reliance’s move is significant since it follows failed efforts since 2020 to conclude a $3.4 billion agreement to purchase Future’s retail operations, which Amazon.com Inc has banned due to contract violations. Future is adamantly against any misconduct. Reliance had transferred leases of several debt-ridden Future outlets to its name and rented them to Future, but is now taking them since Future failed to make payments. Reliance has offered existing retail employees employment.
Amazon has long contended that the Future-Reliance purchase breached the terms of a 2019 arrangement in which the US giant invested $200 million in the Indian startup. So far, a Singapore arbitration and Indian courts have supported Amazon’s argument.
Future, which has over 1,700 stores, including renowned Big Bazaar locations, has been unable to meet lease payments for several of its locations. As a result, Reliance moved the leases of several stores to its name and rented them to Future to manage the stores, according to the sources.
After the purchase was revealed in August 2020, numerous landlords approached Reliance because Future Retail was unable to pay the rent.
According to the sources, Reliance then entered leased agreements with these landlords and, if feasible, sub-leased these buildings to Future Retail Ltd (FRL) so that its operation could continue.
All of the stores that Reliance is taking over are losing money, and the remaining outlets will be handled by FRL. FRL’s operational losses will be minimised as a result, and the company will be able to continue as a going concern, they claim.
According to an industry insider, Reliance will examine and exploit economically feasible properties. Reliance will re-employ roughly 30,000 retail employees who would have been laid off otherwise.