Future Group founder Kishore Biyani has made a public announcement after selling the retail business to Reliance Retail. He explained the huge loss of Rs 7,000 crore in the past few months due to the Covid-19 pandemic. The six month lockdown period has incurred revenue loss and also a debt to the business. Earlier, Amazon had sent a legal notice to "Future Group" due to the deal with Reliance Retail, as Amazon also partially owns Future Group's subsidiary.
"We got into a trap with Covid-19. Never did I imagine that our stores would be closed for 3-4 months at a stretch, but it happened. We lost Rs 7,000 crore of revenue in the first 3-4 months. Rent and interest did not stop even if sales took a hit (due to the pandemic). No company could have survived losing so much money," he said at the Phygital Retail Convention, a virtual conference.
Amid the controversy with Amazon, he said that the lesson he learned due to the loss is to think small and becoming digital-first. "The last six to seven months was a good time for introspection. India is a large country, and one cannot do every market or assortment in one go. I've realized that small is also beautiful. We did too many acquisitions in the last 6-7 years. That was a mistake. The single biggest lesson for me has been to think local rather than national. Stretching one's balance sheet behind new business development can be tricky; avoid it. And digitization is the future using AI, machine learning, and data," he said. Interestingly, He had earlier tried to digitize his retail business under a program "Tatashtu," which failed as the pandemic struck. However, he is planning to start the program again with consumer and fashion goods.
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