Kishore Biyani, popularly known as KB among his peers and regarded as the pioneer of modern retail in India bringing convenience shopping to the masses, is finally bowing to the winds of change blowing through the sector, giving control of what it nurtured for more than three decades. to Reliance Retail.
Biyani (59), who started her business in 1987 with the launch of Manz Wear, which later adopted the Pantaloon brand, agreed to cede control of her retail empire to Reliance Retail, a relatively new entrant, a part of Reliance led by Mukesh. Ambani. Industries, in a settlement of Rs 24,713 crore.
Biyani, a man known for his thrifty approach to running the business, has been expanding too much as the need for capital increased to expand his retail business amid increasing competition from new players like Reliance Retail, as well as the advent of of electronic commerce. which he had initially ruled out as challengers.
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Many times he has been forced to divest assets to reduce the mounting debt of his retail empire, a business that is always seen as cash consuming.
In 2012, it sold its majority stake in the Pantaloons chain to Aditya Birla Nuvo for Rs 1,600 crore, which included Rs 800 crore of debt transfer. In 1992, he had listed Pantaloon in the bags to raise funds for expansion, store improvements, and marketing, and from there he never looked back as he created an entire ecosystem for retail, including logistics, and was also a mentor to many other entrepreneurs and brands.
Reliance Retail is part of Reliance Industries led by Mukesh Ambani. Photo: Bloomberg
Back in 2012, Biyani also sold a majority stake in Future Capital Holdings to US-based private equity Warburg Pincus to raise funds and exited a stationery joint venture with US-based Staples by selling all of its participation to the partner.
At that time, his group was burdened with a debt of around 5,000 crore rupees.
Similarly, in 2013 Future Lifestyle Fashion Ltd (FLFL) divested minority stakes in ethnic clothing firm Biba Apparels and AND-owned designer Anita Dongre for Rs 450 crore.
In August of last year, Biyani sold 49 percent of Future Coupons shares to Amazon.Com NV Investment Holdings LLC. Future Coupons had a 7.3% stake in Future Retail.
Biyani’s Future group ran into financial trouble earlier this year after its publicly traded entity, Future Retail, defaulted on debt and lenders invoked the pledged shares, a drastic low for a man listed in 2019. as the 80th richest Indian with USD 1.78 billion (about Rs 13,016 crore) wealth by Forbes.
Several rating agencies such as Standard & Poor’s and Fitch downgraded Future Retail’s credit ratings after the default and the invocation of the shares pledged by the lenders.
According to some report, Future Group’s debt has now expanded to around Rs 13,000 crore and most of the promoter’s group shares are pledged.
Biyani, a man known for his thrifty approach to running the business, has been overextending himself as the need for capital to expand his retail business has increased.
When things came to a head, Biyani agreed to a deal on Saturday under which Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries, will acquire popular Future brand stores such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris. . , Central and Brand Factory.
To consummate the agreement, the group’s key companies, including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks will merge into FEL and will pass ownership of the retail and wholesale business along with logistics and warehousing. business to RRVL.
Following this transaction, FEL will retain the consumer goods manufacturing and distribution and integrated fashion sourcing and manufacturing business and its insurance joint ventures with Generali and the joint ventures with NTC Mills.
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Biyani, an alumnus of HR College Mumbai, began his journey selling stonewashed denim fabrics in Mumbai in the 1980s.
According to people close to him, Biyani, who owns a battery of brands and made affordable fashion statements to the masses, is known for his simple and traditional lifestyle.
His dream was to make available to everyone what only the rich could afford and he launched his own label, says Biyani’s profile on the Future Group portal.
“During this journey, he also invested in and mentored many other entrepreneurs and brands. He embodies the organization’s creed, Rewrite Rules, Retain Values’ and regards Indianness as the core value that drives the organization,” he says.
Biyani, who began her entrepreneurial journey when she was 26 years old by opening the first Pantaloons store in Kolkata, will now have to look for a new beginning when she is ready to enter 60.
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