Future Group acquired Big Apple, Nilgiri’s and Bharti Retail to create an entity that operates 738 retail stores spread over around 13 million square feet of space across 221 cities.
New Delhi: As reported earlier by ET, Kishore Biyani-led Future Group is in early discussions with Aditya Birla Retail (ABRL) to buy or merge “More” supermarket from the ABRL group. Objective is to consolidate its leadership in the brick-and-mortar retail sector and to build a large network of stores that could be leveraged in alliance with ecommerce companies for multi-channel sale of food and groceries.
After Nilgiri, Bharti Retail and Big Apple, Kishore Biyani this time is eyeing a fourth acquisition in the form of ‘More’ in the highly growing food retail segment in less than five years. Future Group acquired Big Apple, Nilgiri’s and Bharti Retail to create an entity that operates 738 retail stores spread over around 13 million square feet of space across 221 cities.
On the other hand, Aditya Birla Retail’s core focus is on apparel segment which is also a high margin business in India with margins as high as 30%. Aditya Birla operates 500-odd stores covering about 2 million square feet of retail space and grossed revenues of Rs 2,948 crore during 2014-15.
Greater economics of sale along with several advantages including joint sourcing and synergies will enable the Future Group to expand its presence in the South, where More has a strong footprint. In addition, the large network of stores could be leveraged for online sale of food and groceries that is estimated to generate annual revenues of $5 billion by 2020.
Moreover, Future Group sells more than two dozen private labels in segments like foods, snacks and beverages, home care and personal hygiene. The deal will also enable Future Group’s FMCG arm — which sells such products to expand reach.
As shared with ET earlier, Future Group expects its own food brands such as Golden Harvest, Tasty Treat and Sunkist to account for nearly 70% of earnings from corresponding product categories at its supermarkets as it targets a sales revenue Rs 20,000 Rs 20,000 crore from its in-house brands by 2021.
Click Here for Original Source – Economic Times