Reliance To Take Over 947 Stores Leased To Future Retail, Lifestyle Fashions
Reliance To Take Over Stores Leased To Future Lifestyle Fashions
Future Lifestyle Fashions Ltd. has received termination notices on 112 sub-leased properties from Reliance Retail Ventures Ltd. due to pending dues.
It includes 34 Central stores and 78 Brand Factory outlets, the company said in a stock exchange filing. In another late night notification to the bourses, Future Retail Ltd. said it has received termination notices from Reliance Group in relation to another 835 sub-leased properties—342 large format stores, including Big Bazaar, Fashion@Big Bazaar, and 493 small format stores such as Easy Day and Heritage stores.
These stores — which contribute 55-65% of Future's retail revenue — are now shut for “stock and inventory reconciliation”, it said.
This is in addition to the 200 Big Bazaar stores that Reliance Retail took control of after the Future Group defaulted on payment for renewing the lease, according to a company spokesperson.
In 2020, the landlords of these stores transferred the lease to Reliance Projects and Property Management Services Ltd. after the Kishore Biyani-owned group failed to pay rent.
In order to protect the value of the company, the Reliance Industries Ltd.'s group company took over the lease, and then sub-leased all these premises back to Future Group entities, so that its business could continue.
However, Reliance has now terminated the contract.
The Future Group management said it is holding discussions with the owners of the leased premises to evaluate options and ensure continuity of operations at these stores. “The company is in continuous discussion with Reliance Group for maintaining status quo and safeguarding the interest of various stakeholders,” it said in a statement.
In August 2020, Reliance Industries entered into an agreement with the cash-strapped Future Group to purchase its retail assets for Rs 24,731 crore. The deal, however, got caught in a legal tussle after Amazon.com NV Investment Holdings LLC objected to it.
Meanwhile, the Future Group recently acknowledged in an exchange filing that it is finding it difficult to keep the stores open due to a cash crunch.