Future Group Gamble
Reliance Industries has backed out of its deal with Future Group and therefore, lenders are now initiating bankruptcy proceedings against Future Retail. Reliance’s retail business hasn’t been able to penetrate big cities owing to real estate concerns, and Future Retail was expected to solve this problem of Reliance as it has stores in prime locations and a loyal clientele. Reliance bid for the Future Group when the latter was on verge of a default, and the merger would have given Reliance access to a successful large format brand. However, with the cancellation of the deal, Reliance’s e-commerce ambitions in the fresh products and groceries space have also been dealt a heavy blow and have stalled its plans to edge past Dmart. Meanwhile, Future Retail also owes Reliance over INR 3,000 crore in rent. Reliance had recently taken over 900 Future Retail Stores, through a physical takeover involving inventory, furniture, lighting, and other equipment, however, the same will have to be returned to creditors when demanded. Although, many experts argue that the entire setup was for real estate and that has been achieved.