Future Retail posts net loss of Rs 692 cr in Q2, revenue declines 74%

Future Retail, the flagship unit of the Future group, reported a net loss of Rs 692.36 crore for the quarter ended September 30, 2020, hit by disruptions caused by the Covid-19 pandemic. The company reported a profit of Rs 165.08 crore in the corresponding quarter of the last year.

Its revenue from operations was down nearly 74 per cent at Rs 1,424.21 crore during the quarter as stores remained shut and walk-ins were thin despite the government kicking off an unlock programme in July-September. The revenue from operations stood at Rs 5,449.06 crore in Q2FY20.

Future Retail admitted in a statement that the Covid-19 pandemic had impacted its business significantly. The company oversees operations of Big Bazaar, Foodhall, HyperCity, fbb among other retail formats of the Future group. Along with Future Lifestyle Fashions, which has apparel retail stores such as Central and Brand Factory, retail operations of the group are housed within these two entities.

In August, Future group sold its retail assets along with its logistics and wholesale businesses to Reliance Retail in a nearly Rs 25,000-crore transaction. This deal is now being contested in court by former Future group partner Amazon, which says it is in breach of a 2019 agreement.

The Singapore International Arbitration Centre (SIAC) on October 25 passed an interim order in favour of Amazon barring Future Retail from taking any step to dispose its assets to Reliance.

 

Amazon had argued that the deal with a Future group promoter entity had a clause that prevented Future from dealing with 30-odd entities including Reliance Retail. Amazon has an indirect stake of 5 per cent in Future Retail.

On Thursday, Future Retail told the Delhi High Court that Amazon was not its shareholder directly and therefore had no say in its affairs. The interim order passed by the SIAC, it said, was of no value.

The court had on November 10 sought a response from Amazon on Future Retail's plea alleging that the e-commerce major was interfering in its deal with Reliance Retail on the basis of an interim order by a Singapore arbitrator.

Last week, Amazon had written to markets regulator SEBI and the stock exchanges seeking to enforce the interim order.

Both Future Retail and Reliance have maintained that they will look to conclude the deal. One of the reasons for this being that the deal will help Future group get out of its debt woes, while Reliance Retail will consolidate its presence as the largest organised retailer in the country.