The store, still branded as Big Bazaar, Future’s largest brand, was repatriated by potential customers due to closure, but will soon be renamed Reliance Store.
Reliance Industries, led by Mukesh Ambani, India’s richest man, has asked Amazon.com Inc. to bring the seized business assets under practical control. Across India, similar scenarios are emerging as he wants to become a co-owner.
The Supreme Court of India is currently hearing a dispute between corporate Titans over Amazon’s attempt to block Future Group’s Reliance $ 3.4 billion in retail assets.
The acquisition of Reliance started very quietly on the night of February 25 and its employees started coming to Future Stores. Many members of Future management were in the dark about the plans because store staff across the country began to call out frantically, those who knew directly about the matter.
“It was tense, everyone was freaking out. We do not know who they are. They have access, the elderly do not know,” an employee of a Big Bazaar store in New Delhi described what happened at around 8 pm. that day.
At a futures store in the city of Sonipat in the northern state of Haryana, announcements were made to exit customers following the acquisition by Reliance. In Vadodara, West Gujarat, another source said that prospective employees coming to work the next morning were told to go home without explanation.
Citing unpaid payments by Future, Reliance has acquired the operations of about 200 Big Bazaar outlets and plans to acquire another 250 Future outlets. They represent the crown jewels of Future’s retail network and approximately one-third of all Future outlets.
Although Reliance did not play a major public role in the legal issue, it did take a number of leases held by Future, India’s number two retailer and Amazon’s business partner, for several months. Money.
It seems that Reliance is suddenly in possession of what some analysts say is a knock-out blow that will ruin Amazon’s chances of converting Future Reliance’s assets. Despite a series of legal battles so far won by the US e-commerce company, the 2020 deal announced between the two Indian companies has stalled.
“Why is Amazon going to fight now?” Said someone close to the U.S. company who knew about the legal dispute. “The shops are gone”.
Representatives from Reliance, Amazon and Future did not answer Reuters’ questions about the story. Evidence asked not to be identified because of the sensitivity of the controversy.
After recovery, discussions
Future Retail, in its February 26 statement, did not mention Reliance and said it would “reduce its operations” to mitigate its losses. The Future Group has a total debt of more than $ 4 billion.
Sources say Reliance plans to retain future employees in the stores it picks up.
Amazon holds shares in a separate segment of the Future Group, which prevents Future from selling retail assets without its permission, calling supermarkets and other network stores “unaffordable,” with annual revenues of $ 900 billion.
Over time, legal conflicts escalated and were marked by glorious rhetoric. At one point, Amazon Future CEO Kishore Biyani called for him to be jailed for violating a legal order. The future once compared the Amazon to Alexander and his “ruthless ambition to burn the earth.”
But on Thursday, six days after Reliance’s action, Amazon called for smooth talks to end the controversy unexpectedly at the Supreme Court hearing – the future agreed.
“People have taken over the stores. We’ll have at least one conversation,” said Gopal Subramaniam, an Amazon lawyer.
Discussions should begin soon.
Analysts say Amazon has underestimated Reliance, regardless of the outcome of the talks.
“If anyone should have seen it coming, it’s Amazon, and they should have been prepared for it,” said Devangshu Dutta of Third Eyes, a retail business consulting firm.
“Obviously they didn’t.”