Kishore Biyani, the pioneer of modern retail in India who made convenience shopping accessible to the masses, is finally yielding to the winds of change sweeping across the retail sector. In a Rs 24,713 crore deal, Biyani (59) has agreed to hand over the control of his retail empire that he has nurtured for over three decades to a relatively new entrant, Reliance Retail; a part of Reliance Industries led by Mukesh Ambani.
He started his entrepreneurial journey in 1987 by launching Manz Wear which later adopted the brand name ‘Pantaloon’. As a 26-year-old, he’d opened the first Pantaloons store in Kolkata. A man known for a thrifty approach to running the business, Biyani has been spreading himself too thin, as the demand for capital increased to expand his retail business amidst an increasing competition from recent players like Reliance Retail as well as the advent of e-commerce, which he had dismissed as challengers initially.
Many a time he has been forced to divest assets to reduce the mounting debt of his retail empire, a business often considered to be cash consuming. In 2012, he sold his majority stake in the Pantaloons chain to Aditya Birla Nuvo for Rs 1,600 crore, including debt transfer of Rs 800 crore. Back in 1992, he had listed Pantaloon on the Paris Stock Exchange to raise funds for expansion, store improvements and marketing. Since then he never had to look back, as he created an entire ecosystem for retail including logistics, while also mentoring several other entrepreneurs and brands.
Last year in August Biyani had sold 49 per cent stake in Future Coupons to Amazon.Com and Nevada Investment Holdings LLC. At that time, 7.3 per cent stake in Future Retail was held by Future Coupons. Earlier this year Biyani's Future group encountered financial difficulty after his listed entity 'Future Retail' defaulted on debt repayment and lenders invoked pledged shares, a drastic low for a man who in 2019 was mentioned as the 80th richest Indian with USD 1.78 billion (approx.. Rs 13,016 crore) wealth by Forbes.
When the situation reached a critical stage, Biyani agreed to a deal on Saturday 29 August under which Reliance Retail Ventures Limited (RRVL), a wholly-owned, step-down subsidiary of Reliance Industries, will acquire renowned Future brand stores like Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory. In order to consummate the deal, the main group companies including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks will merge into FEL and will transfer the ownership of retail and wholesale business along with that of logistics and warehousing business to RRVL.
After this transaction, FEL will retain the manufacturing and distribution of FMCG goods and integrated fashion sourcing and manufacturing business and its insurance JVs with Generali and JVs with NTC Mills.
An alumnus of Mumbai's H R College, Biyani started his journey selling stone-wash denim fabric in Mumbai in the 1980s. He dreamt of making available to everyone what only the rich could afford and launched his own label.
"He embodies the organisation's credo, Rewrite Rules, Retain Values' and considers Indianness as the core value driving the organisation," says Biyani's profile on the portal of Future Group.
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