India’s Future Retail suspends supermarket operations as Reliance eyes takeover

A man walks into the Big Bazaar retail store in Mumbai, India November 25, 2020. REUTERS/Niharika Kulkarni/File Photo

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NEW DELHI, Feb 27 (Reuters) – Future Retail Ltd (FRTL.NS), India’s second-largest retailer, suspended most of its online and offline operations as stores remained closed on Sunday, after rival Reliance offered to take over its flagship supermarkets for missed lease payments.

Reliance Industries Ltd (RELI.NS) will rename stores to Future after the company failed to make payments for them to Reliance, sources told Reuters on Saturday, closing most outlets of the popular Big Bazaar chain . Read more

Although Future has over 1,700 outlets, all of the 200 stores that Reliance will rebrand will be Big Bazaars, which was launched around two decades ago by Kishore Biyani, dubbed India’s retail king for transforming the sector.

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Future and Reliance did not respond to requests for comment. Future told exchanges on Saturday that the company was “reducing operations.”

Future stores across India remained closed across India as Reliance took inventory ahead of a rebrand, people familiar with the plans said.

“We regret to inform you that currently the stores are not operational for 2 days,” Big Bazaar told a Twitter user who complained about a closure.

Future’s mobile app and e-commerce website were also unavailable for online ordering.

Reliance’s move is significant because it follows failed efforts since 2020 to strike a $3.4 billion deal to acquire the retail assets of Future, whose deal partner Inc has blocked. alleging breach of contract. Future denies any wrongdoing.

Reliance had transferred the leases of some indebted Future stores into its name and sub-leased them to Future, but is now taking over as Future failed to make payments. Reliance offered jobs to store staff on existing terms.

“All employees, consumers and everyone in India – we are all committed to the Big Bazaar brand,” a Big Bazaar employee said on Sunday. “So you feel sad that this is happening.”

By blocking the Future-Reliance deal, Amazon has long argued that Future breached the terms of a 2019 deal in which the US giant invested $200 million in the Indian company. Amazon’s position has been supported so far by a Singapore arbitrator and Indian courts.

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Reporting by Aditya Kalra in New Delhi; Editing by William Mallard

Our standards: The Thomson Reuters Trust Principles.

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