Future Retail is scaling down its operations to reduce its losses in the coming months, after being caught up in a legal battle with Amazon.
“The company has been finding it difficult to finance the working capital needs. Increasing losses at store level is a grave concern and is a vicious cycle where larger operations are leading to higher losses. The company has made a loss of Rs 4,445 crore in the last four quarters,” Future Retail said in an exchange filing.
The organization said it has received termination notices for a critical number of stores due to tremendous outstanding, and it would never again have access to such store premises.
“The company is scaling down its operations which will help us in reducing losses in the coming months. The company is proposing to expand its online and home delivery business, to increase its reach to the customers,” Future Retail, which operates Big Bazaar, said.
The organization said that Reliance has expanded the long-stop date for its plan of course of action, under which it was to secure the retail resources of Future Group, till September 2022. Future Group is facing a court conflict with online retailer Amazon which has had the option to hinder the procurement of the previous’ retail resources by Reliance referring to the infringement of certain agreements.
“The shareholders are aware that FRL is going through an acute financial crisis. The company has defaulted on its loan servicing and as already informed, the account of the company has been classified as NPA by the banks,” the filing said.