Reliance takes over operations of Future Retail stores
Reliance Industries has effectively taken over the operations of Future Retail stores and has offered jobs to its employees, even as the Kishore Biyani-led group is locked in a bitter battle with e-commerce major Amazon at several judicial forums over the sale of its business to the retail arm of the oil-to-telecom conglomerate.
Reliance Retail has started to take possession of the premises in which Future Retail is operating its stores such as Big Bazaar and replaced them with its brand stores, said sources close to the development. It has also started to offer jobs to employees of Future Retail stores and bring them on Reliance Retail's payroll, they added.
When contacted, Amazon declined to comment on the development.
Future Group Founder Kishore Biyani.
After the deal was announced in August 2020, several landlords approached Reliance as Future Retail was unable to pay the rent.
After this, Reliance signed leased agreements with these landlords, and wherever possible, it sub-leased these premises to Future Retail Ltd (FRL) so that its business could continue, the sources added.
All of these stores which Reliance is taking over are loss-making and the balance stores will continue to be run by FRL. In this way, FRL's operating losses will be reduced and it can continue as a going concern, they said.
However, the exact number of stores that would now come under Reliance Retail could not be ascertained.
As per an industry source, Reliance will evaluate and use such premises which are found to be commercially viable. In doing so, Reliance will re-employ nearly 30,000 store staff, who would have otherwise lost their jobs.
In August 2020, the Kishore Biyani-led Future Group announced a Rs 24,713-crore deal with Reliance Retail Ventures Ltd (RRVL) for the sale of the retail and wholesale business, and the logistics and warehousing verticals.
However, the deal was opposed by Amazon. The US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020. The matter is also pending before other forums such as the Supreme Court, Delhi High Court and NCLT.