Kishore Biyani’s Future Group is looking at raising around Rs 600-800 crore this fiscal by selling some stake in fashion brands like Biba and AND, the company’s chief financial officer CP Toshniwal said. It is also re-organising its bleeding formats eZone and HomeTown.
“We will be divesting some stake in the brands this year itself. We are in talks with private-equity players for the same,” Toshniwal told FE. He, however, added that due to slowing investment climate in the country, this process will take some time to materialise. Future Group has 28% stake in Sanjay Bindra’s Biba and 22% stake in Anita Dongre’s AND.
The Group’s Future Retail — that owns the Big Bazaar and Food Bazaar chains, apart from eZone and HomeTown — has a debt of R4,000 crore. The debt fell by Rs 2,800 crore, after the sale of the Pantaloons format to Aditya Birla Nuvo and the creation of fashion company Future Lifestyle Fashions (FLFL).
To increase the productivity of its electronics format, eZone, the company is rolling out eZone stores inside Big Bazaar stores. “We are not opening new eZone stores in new cities. Instead, we are beginning to introduce them in Big Bazaar stores so that visibility of electronic items will increase, thereby increasing sales,” Toshniwal said.
In March, the company had merged the operations of eZone and HomeTown, as the company sought to turnaround the businesses. After a year to make them profitable, the company will seek strategic investors for the businesses, executives said.
Future Group is evaluating its businesses to pare its debt and turn-around its loss-making formats at a time when high costs and negative consumer sentiment are affecting retailers’ margins. A slowdown in the economy is also forcing retailers like Future Retail to go slow on expanding its formats. The company will add 1.25 million square feet of space in FY14, lower than the 2 million square feet it added last year, according to the company’s joint managing director Rakesh Biyani.
Future Group has been restructuring itself for the past two years to cut debt and align its businesses. The company sold its majority stake in Pantaloons format to Aditya Birla Nuvo, apart from divesting its non-core businesses like insurance. Last year, it also demerged its fashion businesses into a separate company, thereby creating verticals for facilitating FDI in multi-brand retail.
Future Retail closed six Big Bazaars, four eZone stores, two Food Bazaar stores and two Home Town Express stores during the April-June period. It opened three Big Bazaar stores and 5 eZone stores during the time.