Home >Companies >News >How Future Retail fits well in RIL’s offline retail business

MUMBAI : Reliance Retail Ltd's (RRL) offline presence will now be fortified with Future Retail in its kitty.

While, omnichannel push, expansion of physical network, and innovative store concepts are helping RRL to capture a large piece of the $1.32tn retail market, acquisition of Future Retail's network of stores across its brands will further its offline RRL's expansion, already India’s largest offline retail company.

In an announcement today, Future Group said it has merged its key group companies including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks will merge into Future Enterprises Limited (FEL) which will be acquired by Reliance Retail Ventures Ltd for 24,713 crore.

RRL's retail strategy, could be divided into three categories--offline, online and new commerce (where it is working with Kiranas via a B2B2C model). RRL has 11,784 stores across its formats of consumer electronics, fashion and lifestyle and grocery.

Despite its recent online roll out through JioMart, RRL is is keen to expand its offline presence. "Future Retail's businesses are a good fit in RIL’s retail that helps it expand its offline retail presence and would see further improvement in margins due to improving scale," said an analyst with an international brokerage. He spoke on the condition of anonymity as his company does business with Future Retail and Reliance Retails.

Post the transaction, FEL will retain the manufacturing and distribution of FMCG good and integrated fashion sourcing and manufacturing business and its insurance joint ventures.

Future Enterprises' key formats include Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory. These entities will merge into Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly owned subsidiary of Reliance Retail Ventures Limited (RRVL).

Retail contributes to 24% of RIL’s (sum of the parts) valuation, according to BofA Securities.

Analysts believe this deal could also help RIL hasten its plans for an IPO which is slated in the next three-five years.

Big Bazaar is the flagship brand of FR and one of the largest hypermarket chains with 290 stores across c.150 cities. FBB or Fashion at Big Bazaar is the fashion brand under FR. The brand has 95 standalone stores across 50 cities. It also operates an online platform fashion platform ‘fbbonline’.

Neighborhood store network: These include small format grocery stores -Heritage Fresh store network in South India and Easyday in North India. There are 892 such stores across 300+ cities.

Foodhall is a gourmet food chain and premium lifestyle food superstore. With nine stores, Foodhall stores have range of home-grown brands of niche products and pantry staples.

Brand Factory is India’s one of the largest chain of fashion discount stores that offers more than 200 Indian and International brands at 20%-70% discount. It operates 104 stores across 40+ cities

Central is the flagship retail format under Future Lifestyle Fashion which showcases over 500 brands across 25 fashion categories. There are 49 Central stores across 30 cities.

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