Reliance Future takes charge of the retail store, employing staff
Reliance Industries Limited (RIL) has effectively taken over the activities of Future Retail Stores and offered jobs to their employees. Explain that this was done despite being involved in a retail case with Reliance Teen Beanie-led group giant American e-commerce company Amazon.
Sources close to the development told PTI that Reliance Retail has started occupying the premises where Future Retail operates its stores like Big Bazaar and replacing them with its own brand stores. He said RIL has started hiring employees of Future Retail Stores and bringing them into the pay-roll of Reliance Retail. When contacted by Amazon for comment, the company declined to comment.
Following the announcement of the Reliance-Future Agreement in August 2020, many landlords approached Reliance as Future Retail was unable to pay the rent. Subsequently, Reliance signed lease agreements with the landlords and, where possible, the premises were sub-leased to Future Retail Limited (FRL) so that the business could continue, sources said.
Reliance is taking over the loss store
He said the stores that Reliance was occupying were making losses and the rest would be operated by FRL. This will reduce the operating loss of FRL. However, it is not yet clear how many Reliance Retail stores will cover. According to a source, Reliance will evaluate such premises and use them if found commercially viable. As such, Reliance will re-employ about 30,000 employees. Otherwise, they would have lost their jobs.
The move is in the interest of all FRL stakeholders, including banks, lenders and employees, as the company continues its business and remains valuable, the source said. Future Retail has more than 1,700 retail stores, including Big Bazaar. The company did not pay rent for some of the stores. Sources said that most of the stores are being supplied by Reliance Geomart as FRL is unable to pay the arrears to the existing suppliers due to the cash crunch.
RIL could replace the Big Market sign board with its own brand
Reliance can replace the Big Market sign boards and branding with its own brand from these stores. Without confirming or denying its store acquisition, Future Retail Limited told the stock exchange that shareholders are aware that FRL is going through a serious financial crisis. The company defaulted on the loan and the banks declared the company’s account as NPA.
The FRL says it is finding it difficult to meet working capital requirements and has received notices to vacate most stores due to large arrears, and we no longer have access to such stores.
The matter is in the Supreme Court
Future Group has filed a petition in the Supreme Court challenging the High Court’s refusal to stay the emergency decision of the Singapore Arbitration Center. The arbitration center, in its emergency decision, suspended Future Group’s Rs 24,731 crore sales deal with Reliance Retail to move it forward. This came as a huge relief to Amazon, the e-commerce company that challenged the deal.
In October last year, Amazon brought the matter to the Singapore Arbitration Center. It said Future Retail Limited had breached the investment agreement signed with Amazon in 2019 by entering into a sale agreement with rival company Reliance Retail. Future Retail’s merger agreement with Reliance Retail has been the subject of frequent legal disputes. The matter has been raised for consideration in several regulatory and judicial bodies.
