New Delhi [India], March 3 (ANI): As Mukesh Ambani-led Reliance Industries begins to take operational charge of Future Group's retail stores, which are being rebranded under the Reliance Retail label, vendors, suppliers, landlords and employees of stores of the group see it as a welcome step and have a positive outlook towards it.
They have expressed hopes of reviving the business well, which they claim was not doing very well.
Reliance started taking over the Future Retail stores recently as leases for these stores were in the name of Reliance and Future Group has been finding it difficult to finance the working capital needs of the stores, including making lease payments to landlords thus making it tough to operate the stores any further.
Reliance has been making job offers to employees of these stores, which will ensure job continuity for nearly 30,000 employees of Future Group's retail network.
People in the industry have welcomed this change and said the employees would be relieved that months of uncertainty has ended and there is some job security along with timely salary payments.
A former landlord of Easy Day Mart Pankaj Bansal said the move will be beneficial for employees as they will now receive regular payments. "It is but obvious to face hardships when you don't receive salary for months. Employees were sometimes receiving partial salaries. They were facing troubles. With Reliance taking over, which is a strong group, employees will receive salaries on time."
Similarly, vendors and suppliers too felt expressed their relief with their dues being released. They feel that with this large corporate as their new customer they will have new business opportunities and sustainable business prospects.
Shammi Thakur, Managing Partner of Ambesten Marketing Solutions, said, "It will be good for everyone including the employees and the retail sector. It will open up new opportunities. The problems with payments will vanish. It was a big challenge. There were dues pending for seven years."
"Reliance is a big player in the industry. The money will be recovered with its entry," he added.
Even store owners/landlords had started offering the lease of their stores to Reliance since last year as their rentals were not being paid by Future Group and they were unsure about Future's ability to clear these dues. After negotiating the lease with Reliance their past dues were paid and they hope they will receive the rentals regularly.
Pankaj Bansal, former landlord of Easy Day Mart, said that rent was not being paid on time by the Future Group for the last two years but after Reliance's takeover, he is feeling "relaxed".
"I have an outlet of Easy Day in Ballabgarh. For the past many months, Easy Day has failed to give rent. Many a time they didn't pay rent on time. This has been happening for the last two years. During COVID-19 they didn't pay a single penny to us. So we connected to Reliance Group and they agreed to take over this. Now we feel so happy and relaxed as we are going to work with the world's largest group," Bansal said.
Dr NPVS Raju, President of Sai Shakti infrastructure and landlord and vendor of Heritage store in Hyderabad said that they "suffered" since the Future Group took over their store.
Elaborating on the ordeals with Future Group in place, Dr Raju said, "In 2011, we started the Heritage stores in our premises which is also the first store in the area. After seven years, Future Group took over from Heritage. Since then, we have suffered a lot with irregular payments and not maintaining the stores properly. Sales have gone down and there are not enough employees. They didn't pay the power bills on time and there were power cuts. We had to interfere."
With the Reliance taking over, he says he is looking at a bright future of the Heritage stores.
"Once the Reliance Group takes over, we are expecting that it will do very well. We welcome this and wish Reliance all the best. We see a very good future for the stores and the hope the account will be regular," Dr Raju said.
Future, which is considered as the pioneer of organised retail in India, was going through tough times a couple of years back and was not able to repay its lenders; In mid-2020 it negotiated a deal to sell its retail assets to Reliance. However, Amazon put a spanner in the deal claiming that they had a deal with Future that allowed Amazon to control Future's retail business and any decisions related to the same.
Any such deal would be in gross violation of the country's law and Amazon could not have invested in multi-brand retail in the country as the FDI rules do not permit the same. However, its greed to control the retailer led to a legal tussle which delayed the deal from going through. This had created uncertainty for employees, reduced business for vendors and suppliers and left a large payment overdue to landlords, suppliers and lenders.
With losses mounting the lenders were jittery and the company was staring at insolvency which would have meant loss for lenders and creditors as well as job loss for all the company's employees. However, with the loss-making stores being taken over by Reliance, any insolvency proceedings may be delayed for now and lenders and creditors can now hope that their dues will be cleared once the scheme of arrangement is approved. (ANI)