Biyani starts process to revive Future Lifestyle Fashions

Future Group has started the revival process for apparel firm Future Lifestyle Fashions Ltd (FLF), which is not part of the insolvency proceedings against the group, a day after Reliance called off its deal to buy assets of the Kishore Biyani-owned retailer.

FLF, which has not defaulted on loan repayments, plans to sell off a few fashion brands in its portfolio to raise Rs 1,000 crore, two officials privy to the development told ET.

The owner department chain Central and discount store format Brand Factory has nearly a dozen apparel labels including Cover Story, aLL, Ancestry, Indigo Nation, Scullers and Urbana in its portfolio.


“The company has already finalised its deal to sell fast-fashion brand Cover Story for Rs 220 crore and will work with banks and existing investors to restructure loans. It has already held discussions with banks which are supporting the revival plan,” one of the officials said. “The idea is to monetise its assets so that it can continue with its business, completely unlinked with the food and grocery business where Reliance has taken complete control of their stores.”

On Saturday, Reliance Industries Ltd (RIL) called off its deal to purchase Future Group’s assets following the rejection of the proposal by a majority of secured lenders to both Future Retail Ltd and FLF. The Rs 24,713-crore acquisition plan was announced in 2020 but saw a protracted legal battle between Amazon and Future Group in Supreme Court as well as an arbitration tribunal in Singapore.

In March, FLF paid Rs 48 crore to banks as per its repayment commitments, unlike Future Retail and Future Enterprises which defaulted on loan repayments worth Rs 8,157.97 crore that was defined in the one-time restructuring (OTR) plan — to various consortium banks and lenders before March 31.

FRL, which owns Big Bazaar and Easyday, is the largest debtor in the group with about Rs 14,000 crore of dues while FLF has a debt of around Rs 2,000 crore.

“FLF has still not defaulted on its interest payment and its business is independent of any Future Group companies that are largely focused on groceries,” one of the officials said. “Hence, the success or failure of the Reliance deal has negligible impact on its survival.”

Two months ago, Reliance took control of over 200 Big Bazaar stores, 34 Central stores and 78 Brand Factory outlets after Future Group defaulted on payment for renewing the lease. Future still has nearly 300 stores, including 11 Central stores, 30 Brand Factory and 190 exclusive outlets for its owned brands.

“While revival (of Future Lifestyle Fashions) is not impossible, it will be much tougher in the current market,” said Abneesh Roy, senior vice president at wealth management and advisory firm Edelweiss Securities. “Over the past 2-3 years, they have not been investing in brand building of these fashion brands and getting higher valuation will be difficult in a fragmented market where rivals such as Tata, Reliance and Aditya Birla have become much larger,” he said.