Biyani gives up after wrestling with debt
New Delhi, Aug 30: Kishore Biyani, considered the pioneer of modern retail in India, taking convenience shopping to the masses, has finally bowed to the winds of change blowing across the sector, giving the control of what he nurtured for over three decades to Reliance Retail.
Biyani (59), who started his business in 1987 by launching Manz Wear which later adopted the brand name of Pantaloon, has on Saturday agreed to hand over the control of his retail empire to new entrant Reliance Retail, a part of Mukesh Ambaniled Reliance Industries, in a Rs 24,713-crore deal.
Biyani, a man known for thrifty approach to running the business, has been spreading himself too thin as the need for capital increased to expand his retail business amidst rising competition from new 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 pare mounting debt of his
retail empire, a business which is always considered cash consuming.
In 2012, he sold his majority stake in Pantaloons chain to Aditya Birla Nuvo for Rs 1,600 crore, which included Rs 800 crore of debt transfer. Back in 1992, he had listed Pantaloon on the bourses to raise funds for expansion, store improvements and marketing and from there it was never a look back for him, as he created an entire ecosystem for retail including logistics and also mentored many other entrepreneurs and brands.
Again in 2012, Biyani had also sold a majority stake in Future Capital Holdings to US-based private equity Warburg Pincus to raise funds and exited from a stationery joint venture with USbased Staples by selling its entire stake to the partner.
At that point of time, his group was laden with debt of around Rs 5,000 crore.
Similarly, in 2013 Future Lifestyle Fashion Ltd (FLFL) divested minority stakes in ethnic wear firm Biba Apparels and designer Anita Dongre-owned AND for Rs 450 crore.
In August last year Biyani had sold 49 per cent stake in Future Coupons to Amazon.com NV Investment Holdings.
According to some reports, the debt of Future Group has now reached around Rs 13,000 crore and most shares of the promoter's group are pledged.
When things came to a head, Biyani agreed to a deal on Saturday under which Reliance Retail Ventures Limited, a step down subsidiary of Reliance Industries, will acquire popular Future brand stores such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory.