Future Group founder Kishore Biyani on Wednesday said the retail major lost nearly ₹7,000 crore in revenue in the first three-four months of the pandemic due to closing of stores, which led him to sell his business to Reliance Industries.

In August, billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL) announced the acquisition of retail and wholesale businesses and logistics and warehousing businesses from the Future Group as going concerns on a slump sale basis for ₹24,713 crore.

The deal cover Future Retail, which owns the BigBazaar chain that sells everything from groceries to cosmetics and apparel, and Future Lifestyle Fashions that operates fashion discount chain Brand Factory.

Covid ‘trap’

“We got into a trap, to be very honest, with Covid-19. In the first 3-4 months, we lost nearly ₹7,000 crore of revenue,” Biyani said at the Phygital Retail Convention.

There was no way the company could have survived losing such an amount, he said, adding the problem is rent and interest on debt doesn’t stop.

“We did too many acquisitions in the last six-seven years... I thought there was no other answer but to exit,” he said.

‘Worst yet to come’

He said for retailers, the worst is yet to come. “We have designed business to be profitable at 90 per cent of our targets. In any scenario...we will not be able to touch 70-80 per cent (of target)...If you look at long-term planning — 5 to 10 years — it will not be easy for physical stores,” he said.

While Reliance will take over Future Consumer, which sells food, home and personal care products, Future Group’s financial and insurance business is not part of the deal.

Last week, US online retailer Amazon slapped a legal notice on Future Group, alleging that the retailer’s ₹24,713-crore asset sale to RIL violated an agreement with the e-commerce giant.

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