default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Reliance Calls Off $3.4 Billion Retail Deal With India’s Future Group

Future Retail's network of Big Bazaar hypermarkets are a key part of its physical retail network that has been impacted by the Covid-19 pandemic. Shutterstock
Future Retail's network of Big Bazaar hypermarkets are a key part of its physical retail network. (Shutterstock)

India’s top retailer Reliance on Saturday called off its $3.4 billion deal with Future Group, saying it “cannot be implemented” after Future’s secured creditors rejected it.

The deal was at the centre of legal battles since 2020 after Future’s partner Amazon Inc legally blocked it, citing violation of certain contracts. Future denied any wrongdoing.

In a stock exchange filing on Saturday, Reliance said the deal now cannot go through as “the secured creditors of FRL (Future Retail) have voted against” it.

Future Retail and Amazon did not immediately respond to a request for comment.

Future’s secured lenders on Friday rejected the deal, and the company, once India’s second-largest retailer with more than 1,500 outlets, now faces the prospect of a bankruptcy process.

Future’s fall is “an unfortunate event”, one of the sources with direct knowledge of the dispute said on Saturday.

Amazon had obtained legal injunctions that stalled Future’s deal with Reliance, sparking a series of legal battles in various forums, including an arbitration panel in Singapore.

In February, Reliance stunned the retail industry by suddenly seizing control of hundreds of Future stores, citing non-payment of rent, after assuming many of the leases held by cash-strapped Future.

That spooked bankers, some of whom have already initiated debt recovery proceedings against Future.

By Swati Bhat and Aditya Kalra; editing by Jason Neely

Learn more:

How to Plug Into India’s Dynamic E-Commerce Market

During lockdown Indian e-commerce platforms attracted a bonanza of international investment from the likes of Facebook and a fund backed by LVMH. What can fashion brands do now to tap into this complicated but colossal $43 billion opportunity?


© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
Building a DRC Challenger Brand
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
Building a DRC Challenger Brand