Future Retail To Scale Down Operations Amid Financial Stress
The company has been finding it difficult to finance the working capital needs.
Future Retail Ltd. will scale down operations as the company has been finding it difficult to finance the working capital needs, it said in an exchange notification on Saturday.
“Increasing losses at store level is a grave concern and is a vicious cycle where larger operations are leading to higher losses,” the company said. Losses have added up to Rs 4,445 crore in the last four quarters, it added.
As a result of outstanding payments, “termination notices have been received for significant number of stores,” the company said. “We would no longer have access to such store premises.”
Earlier in the day, Reuters reported that some of these Future Retail stores would operate under the Reliance Retail brand since leases for these have already been transferred to the latter. BloombergQuint could not independently confirm this development.
In its exchange notification, Future Retail said the company is scaling down its operations which will help us in reducing losses in the coming months. “The Company is proposing to expand its online and home delivery business, to increase its reach to the customers.”
It added that the company is hopeful that the Scheme of Arrangement proposed with Reliance will be implemented which will be beneficial for all the stakeholders.
Future Group's proposed deal with Reliance Retail Ventures Ltd has been delayed by a legal tussle with Amazon since August 2020.
