Future Group, led by Kishore Biyani, has hit the media headlines once again. The group is in advance talks with Aditya Birla Retail (ABRL) to crack a deal which will comprise of either merger or acquisition of More supermarket business. If it manages to cash in the deal then it will continue to have an upper hand over the brick-and-mortar retail sector.
According to the sources, while the discussions are still exploratory, the Future Group is preparing to conduct a due diligence exercises for a possible merger or acquisition. There was no guarantee that these talks will culminate in a deal.
Future group is on the expansion spree and if it manages to snap the pact, this will be marked as its fourth acquisition in less than five years. The group acquired Big Apple, Nilgiri's and Bharti Retail to create an entity that operates 738 retail stores spread over around 13 million square feet of space across 221 cities.
Aditya Birla Retail, the fourth-largest supermarket chain in the country after Future Group, Reliance Retail and D'Mart, operates 500-odd stores covering about 2 million square feet of retail space and grossed revenues of Rs 2,948 crore during 2014-15.
Aditya Birla Group is currently targeting more on the apparel segment as it feels that this space has more opportunities of expanding its business. Unlike food and grocery retailing that operates on wafer-thin margins, apparel retailing is a lucrative business with margins as high as 30 per cent, and the group is by far the market leader with brands such as Allen Solly and Van Heusen.