Future Group negotiates rents for its 1,700 stores

MUMBAI: Kishore Biyani-promoted Future Group is negotiating rent for all of its 1,700 stores to cut costs amid the coronavirus outbreak as it looks to save on the annual rental outgo of nearly Rs 1,500 crore.

The retailer is talking to individual landlords and has carved out multiple negotiation strategies. Its Big Bazaar outlets are offering a revenue share model to landlords. For the landlords not agreeable to the revenue share formula, Future group is seeking either a rent deferral or a reduced payment option and stores that are completely shut, the retailer has sought a total payment holiday.

“The idea is to significantly cut down rent costs, so the negotiations are ongoing with each and every landlord to make them understand the extraneous situation we are in,” said an official.

Future Group did not respond to ET’s request seeking comment.

As per the retailer’s annual report at the end of March 2019, it had rental expenses of Rs 1,487 crore against Rs 1,405 crore at the end of March 2018. These 1,700 stores operate through brands like Big Bazaar, Food Bazaar, FBB, Home Town, Central and eZone among others. The retail company has 293 BigBazaar stores, 95 FBB outlets and 1,147 small stores.

Retailers Association of India (RAI), which represents some of the top retailers in the country, has made representations to the government to allow a blanket invocation of the force majeure clause to tide over this crisis. The shutdown of outlets due to the pandemic, high inventory and low demand scenario has raised survival issues for several retailers.

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