The future group has a string of retail stores for its consumers all around India. It has slowly and steadily expanded its business by opening new shops and also increasing its portfolio. Today it has expanded into food, fashion and FMGC sectors. Seeing the rapid growth of the company Reliance has bought a stake in Future group investing Rs 24,713 crores.
Reliance’s moto behind buying a stake in future group
There are over 2000 future group retail stores across the country. The kind of impact these stores have is enormous. As per some stats the stores have recorded over 600 million visits over the years. Future Group also has its presence online. Millions of people and users interact with the group’s brand and business through various social sites like Future pay.
Seeing, the vast customer base and reach, Reliance decided to buy a stake in the company. Therefore, Reliance will be able to use the reach of the future group to give competition to sites like Amazon and Flipkart. Isha Ambani, Director, Reliance Retail Ventures Limited, said:
“With this transaction, we are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which has played an important role in the evolution of modern retail in India. We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands. We are committed to continuing providing value to our consumers across the country.”
On acquiring the stake, the company said, “Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance Industries Ltd will acquire the retail and wholesale business and the logistics and warehousing business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of INR 24,713 crore,”.
Future of this partnership
The partnership between Retail and Future Group is undoubtedly going to be beneficial for the company. They are going to give a tough competition to e-commerce sites like Amazon and Flipkart. With most probability, the quality of services of the group will also improve.
This in turn will increase the reach of Future Retail to small businesses and thus increase RRVL’s profits. Presently they recorded a complete turnover of Rs 1.62 lakh crore and a net profit of Rs 5,448 crore for the financial year ended March 31, 2020.
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