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Top retailer Reliance will take on at least 200 Future Retail stores after the company failed to make lease payments for them to Reliance, two people with direct knowledge of the matter said on Saturday.
Since 2020, Reliance has failed to close a $3.4-billion deal to acquire the retail assets of Kishore Biyani's Future Group, whose partner Amazon has successfully blocked the transaction by citing violation of some contracts. Future denies any wrongdoing.
The takeover of stores by Reliance signals Future's worsening financial situation. Future in January challenged its lenders in the Supreme Court to avoid facing insolvency proceedings over missing bank payments, citing its dispute with Amazon.
Future - which has more than 1,700 outlets, including the popular Big Bazaar stores - has been unable to make lease payments for some outlets. As a result, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores, the sources said.
As Future failed to make the payments, Reliance has decided to rebrand and run about 200 outlets that would otherwise be closed, they said.
In a statement to stock exchanges, Future said "termination notices have been received for a significant number of stores" to which it will "no longer have access." The company is "scaling down operations which will help us in reducing losses in the coming months," it said, without mentioning Reliance's plan to take over many such outlets.
Reliance and Amazon did not respond to requests for comment.
Since 2020, Reliance has failed to close a $3.4-billion deal to acquire the retail assets of Kishore Biyani's Future Group, whose partner Amazon has successfully blocked the transaction by citing violation of some contracts. Future denies any wrongdoing.
The takeover of stores by Reliance signals Future's worsening financial situation. Future in January challenged its lenders in the Supreme Court to avoid facing insolvency proceedings over missing bank payments, citing its dispute with Amazon.
Future - which has more than 1,700 outlets, including the popular Big Bazaar stores - has been unable to make lease payments for some outlets. As a result, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores, the sources said.
As Future failed to make the payments, Reliance has decided to rebrand and run about 200 outlets that would otherwise be closed, they said.
In a statement to stock exchanges, Future said "termination notices have been received for a significant number of stores" to which it will "no longer have access." The company is "scaling down operations which will help us in reducing losses in the coming months," it said, without mentioning Reliance's plan to take over many such outlets.
Reliance and Amazon did not respond to requests for comment.
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