Reliance Retail to bring luxe arm under its fold to boost efficiency

Reliance Brands, the luxury and premium retail subsidiary of Reliance Retail, is merging operations with its parent company ahead of the latter's proposed listing, people familiar with the plans told ET.

The consolidation is part of a broader plan to drive efficiency in the retailing business that has lately seen multiple points of sale consolidate through a period of tepid consumer demand.

Reliance Brands, which started way back in 2007, will operate as a separate division within Reliance Retail. The move would consolidate overlapping functions-such as property, operations, and back-end teams-under a single umbrella to reduce duplication and foster a leaner structure.

"It just brings greater efficiency and avoids duplication. The focus is on better management," a person aware of the development noted.

Reliance did not comment.

Reliance Brands has partnered more than 85 global luxury and lifestyle labels including Burberry, Bottega Veneta, Tiffany & Co., and Pret A Manger, among others. It has played a key role in shaping Reliance Retail's presence in high-end fashion and global brand distribution across India.

The company has not appointed a new CEO or president, and business heads have already been reporting directly to the Reliance Retail board. The new reporting arrangement indicates the luxury division is being more closely integrated into the group's central leadership and decision-making structure.

In FY25, Reliance Retail closed 2,155 stores in FY25, more than double compared with a year ago, as part of a rationalisation process that helped margin expansion. The firm had 77.4 million sq ft of retail space as of March-end and recorded an 8% increase in net revenue to '2,90,979 crore in FY25 with net profit at '12,392 crore, a 12% increase.

Reliance Brands had sales of '2,684 crore, a 12% growth, while net losses widened to 'crore in FY24.

However, the numbers do not reflect all its brands and JVs that are either part of Reliance Retail Ventures or have their own independent unlisted company.

For the parent Reliance Industries, the retail segment now accounts for 15% of its earnings before interest, taxes, depreciation, and amortisation (EBITDA) compared with 10% four years ago.

Experts believe Reliance Brands needs a distinct strategy compared with Reliance's other retail businesses.

"If one wants to alight consumer interest, Reliance Retail should be segregated into three companies each for luxury brands, grocery and fashion brands since they require different sourcing expertise, logistics and assortment management," said Govind Shrikhande, retail professional and former CEO at Shoppers Stop. "Bringing all companies together while managing them separately could lead to better valuation."