Kishore Biyani wants to play the core game

He plans to sell and merge Zone with Big Bazaar

The latest plans of Kishore Biyani to sell and merge Zone with Big Bazaar is a continuance of his strategy of shedding the flab and focusing on the core business, say sources close to him.

A person who has closely worked with him said while Biyani sold Pantaloons and Future Capital to pare his debt, he wants to now focus on his core business of food and fashion.

"Earlier he had to be ruthless to sell even a profit making Pantaloons to Birla, now he has to sell Home Town to be competitive and preserve cash," the executive said.

Biyani could not be contacted for comments.

In 2012, Biyani sold his department store Pantaloons to Aditya Birla group for Rs 1600 crore.

Subsequently, he sold stake in financial services firm Future Capital to PE major Warning Pincus for Rs 560 crore.

He also sold stake in fashion brands Biba to pare debt.

Recently, Biyani announced that he is going out of online venture Big Bazaar Direct due to invisibility.

Biyani had said the customer acquisition costs, fulfillment costs and other costs in e-commerce add up to 50 per cent of overall business costs which does not make sense to run the business.

He further added that for a single customer acquired in most of the transactions in e-commerce, Facebook and Google get Rs 800 to Rs 1400, without explaining how they make money.

“It is not possible to make profits in such a scenario,” he said.

Taking a dig at e-commerce ventures, Biyani said their business models are not sustainable. “We are happy with old fashioned retail business. There is profit in it. Our business model has arrived. Theirs is yet to arrive,” he said.