“The termination has been with mutual consent as the Future-7 was not able to meet the target of opening stores and payment of franchisee fees.No financial or business impact on the company as this arrangement was at subsidiary company level,” FRL said in a statement.
Both retailers had partnered in Feb 2019 with an agreement that the Kishore Biyani-owned retail company will develop and operate the US company’s convenience stores in the country.Future had then said they will open their small format stores starting with Mumbai in 2020 and will stock fresh food and beverages, over-the-counter products, and also have cafes within the outlets. The stores were pitched against round-the-clock convenience store chain Twenty Four Seven, promoted by Modi Enterprises, and In & Out, which is run by state-owned Bharat Petroleum Corp. Ltd.
However, covid led restrictions and rising debt derailed the plans. Biyani, who used aggressive pricing to attract middle-class Indian consumers to his stores — Big Bazaar, Central and Brand Factory — saw his companies being burdened with a net debt of Rs 12,989 crore with the entire shareholding of the promoters being pledged with lenders by March 2020.
In August last year, Reliance Retail Ventures agreed to buy Future Group retail assets on a slump sale basis for about Rs 25,000 crore. That deal has still not been completed because US-based Amazon, which owns 49% in group promoter firm Future Coupons, objected to the deal and approached an arbitration court in Singapore, which said the transaction should be suspended pending a final decision.
The Japanese-owned, US-headquartered 7-Eleven at a group level, clocked nearly $100 billion in annual sales last year from over 67,000 7-Eleven stores among other retail formats. Globally, corner shops including 7-Eleven in Japan, Taiwan, Thailand and Singapore, Lawson in Japan and Oxxo in Mexico are among the largest retailers in their respective markets, reflecting the growing business of small outlets in several countries despite the presence of international supermarket and hypermarket chains.
