Future Retail, India’s second-largest retail chain, is cutting operations to cut losses, it said, the latest casualty in its years-long battle with ex-partner Amazon.
The company, led by Kishore Biyani, said in stock exchange filings that it was struggling to fund working capital needs and that its store-level losses were “increasing” and “seriously concerning”.
Future Retail has lost about $593 million over the past four quarters, it said in the documents.
The admission follows a local media report that Reliance Industries – which has entered into a now highly contested $3.4 billion deal to acquire several Future Retail operations – was taking in approximately 200 of the 1,700 Future stores and absorbing up to 30,000 workers from the small retail giant after negotiating deals with landlords.
Reliance will rebrand these outlets as its own, Business Standard reported. Reliance Industries had no comment.
Reliance Retail operates the largest chain of retail stores in India. Shortly after announcing that it was to acquire the retail, wholesale, logistics and warehousing businesses of Future Group, things started to get messy.
Amazon, which invested in one of Future Group’s units three years ago, accused Future Retail of breaching its contract and went to Singaporean arbitrator to stop the agreement between the Indian firms.
At the time of the partnership with Amazon, a Future Group spokesperson said the US giant’s investment “gives us an opportunity to learn about global trends in digital payment solutions and launch new products.”
Amazon’s deal with Future Retail had given the US e-commerce giant the first right of refusal on buying more stakes in Future Retail, Amazon argued.
The Indian companies, in return, said in 2020 that the Singapore court order was not valid in the South Asian market. India’s competition watchdog, the Competition Commission of India, has also approved the deal between the Indian companies.
In August last year, India’s Supreme Court ruled in favor of Amazon blocking the sale of Future Retail.
“The ongoing litigation initiated by Amazon in October 2020, and which has been ongoing for a year and a half, has created serious obstacles to the implementation of the program, resulting in serious negative effects on the operation of the company,” said said Future Retail. Recount (PDF) the scholarship.
Amazon identifies India as a key overseas market. The company, which has invested more than $6.5 billion in its India operations, has also taken stakes in supermarket and hypermarket chain More and department store chain Shoppers Stop in the country.