By Devangi Narang
Kishore Biyani led Future Retail is in talks with HyperCity Retail, both part of the K. Raheja Corp. Group, for a possible merger between the two. All discussions at this stage are exploratory in nature. The company keeps on evaluating various possible business associations or transaction at any given time. However, at present, there is neither a legally binding agreement nor any business collaboration or association, Future Retail said in a regulatory filing.
About HyperCity and K. Raheja Group
HyperCity is a supermarket chain which currently operates 20 stores throughout India. The main area of focus is food, home and fashion. Founded in 2006, HyperCity Retail India Ltd. is a part of the K. Raheja Corp. Group.
HyperCity opened its first store in Malad, Mumbai. Since then, a total of 20 stores have been launched in cities like Hyderabad, Bangalore, Jaipur, Amritsar, Bhopal, Mumbai, Ahmedabad, Vadodara, Pune, Delhi-NCR, Panvel and Thane. Raheja Corp. Group also operates retail chains under Shoppers Stop and Crosswords in India. Biyani is also known for aggressive expansion of the groups operations through mergers and acquisitions. In the past, Biyanis Future group has acquired Bharti Retail, South India-based convenience store chain Nilgiris and retail business of Heritage Food.
Future Group on an expansion spree this year
In May 2015, the Future Group announced that it had agreed to merge its retail business with rival Bharti Retail in an all-stock deal worth Rs750 crore, to create one of the biggest supermarket chains with a turnover of Rs15,000 crore.
In November 2014, Future Group company Future Consumer Enterprise Ltd acquired South India based convenience store chain Nilgiris for nearly Rs 300 crore. Last year, it acquired Heritage Freshs 136 retail stores in Hyderabad, Chennai and Bengaluru. Future Retail acquired Easy Day after a merger with Bharti Retail in May 2015. It recently purchased online furniture entity Fabfurnish.com, which is expected to merge with Futures home products chain, Home Town. Future Retails flagship brands include Big Bazaar, Fashion at Big Bazaar, and Food Bazaar.
Future growth prospects for Future Group
Future Group hopes to add 3 million square ft. of retail space across its businesses in the next one year, its largest expansion till now. The expansion would be about a sixth of its total space-18 million square ft. According to an executive, the company is looking to add 35-40 hypermarket stores of Big Bazaar,10-11 department stores of Central,14-15 discount stores of Brand Factory and 400 small format stores of Easy Day. It would fund the plans majorly through internal cash flow. According to estimates by analysts, the group would need around Rs 400 crore to expand at such a huge level. The company also expects to grow its fashion business to Rs. 12,000 crores in FY18.
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