Raheja Group’s multi-brand fashion retailer Shoppers Stop Ltd on Saturday announced selling 5 per cent of its equity share (43.96 lakh shares) of Rs 5 face value to e-tail giant Amazon.com at Rs 407.78 per share, aggregating to Rs 179.26 crore on a preferential basis.
But is this all that Shoppers Stop is selling? According to a recent report by Moneycontrol, Shoppers Stop may just be getting rid of Hypercity, it’s big box supermarket retail chain. The business, which had appointed Ramesh Menon as CEO last year has been floundering for some time now, not being able to maintain its own in front of its bigger and more popular competition, Big Bazaar.
HyperCity operates in nearly 20 large format stores in cities such as Mumbai, Hyderabad, Bengaluru, Bhopal, Ludhiana, Amritsar, Jaipur, Pune, Ahmedabad, Delhi and Noida in Delhi- NCR.
Meanwhile, Big Bazaar, Future Retail’s flagship brand, is India’s largest organised store-based retail market, with nearly 20-25 percent market share. The brand’s 253 outlets are spread across 127 cities in 26 states of India (as on June 30, 2017).
Future Retail is making a habit of taking over regional retail brands to strengthen its store network in India and to expand its grocery retail footprint in the country. Last year, it acquired Heritage Fresh’s 136 retail stores in Hyderabad, Chennai and Bengaluru.
The year before that, it acquired Easy Day after a merger with Bharti Retail in May 2015 – an all-stock deal worth Rs 750 crore to create one of the biggest supermarket chains with Rs 15,000 crore turnover.
Future Retail has also bought over Big Apple in north India.
“All discussions at this stage (about acquiring with Hypercity) are exploratory in nature. The company keeps on evaluating various possible business associations or transaction at any given time. However, at present, there is neither any legally binding agreement nor any business collaboration or association,” Future Retail had said in a regulatory filing.
When asked, Ramesh Menon told Indiaretailing Bureau on the sidelines of India Retail Forum 2017 that he would not like to discuss Future Retail or Hypercity’s Omnichannel strategies at present.
READ MORE: HyperCITY names Ramesh Menon new CEO
According to The Economic Times, the deal involves Rs 250 crore of debt with HyperCity, which will move to Future Retail’s books, Rs 250 crore in cash and the remaining Rs 500 crore in Future Retail’s shares.
For now, though, both Future Retail and Hypercity are keeping their lips sealed and we can only wait and watch.