5. Contd...
• 23rd May 2006- PRIL announced an agreement
to form joint venture with Italy based Generali
Group with 26% stake.
• Future Group planned to operate its insurance
and other financial services such as banking,
personal finance through its financial arm
–
6. Contd…
• Restructuring of Pantaloon group to consolidate
the group leadership position and diversify into
new growth areas in Indian Retail.
• Drivers of growth in Indian Retail Sector:-
– Rising income
– Increased exposure to global products
– Indian attitude towards saving and consumption
– Better infrastructure facilities
– Greater employment generation
9. • The history of PRIL can be traced to the mid 1980s
when Biyani quit his family business to start
manufacturing apparels.
• In 1987 PRIL was incorporated as Manz Wear Pvt. Ltd
and manufactured readymade trousers under
‘Pantaloons’ brand.
• In 1992 Manz Wear went public, and the name was
changed to Pantaloon Fashions (India) Ltd.
10. Contd…
• In 1992 the company inaugurated its first exclusive men’s
store called Pantaloons Shoppe.
• By 1995 the no. of stores had grown to 70.
• In August 1997, the first departmental store called
Pantaloons was opened in Kolkata with an investment of
0.7 million.
• It was the first retail store in India that marketed apparel
for the entire family.
11. Contd…
• The store was a success and recorded revenues of Rs.
100 million within first year of operation.
• In 1999 the company’s name was again changed to
Pantaloon Retail (India) Limited (PRIL).
• To reduce the dependency on third parties PRIL opened a
manufacturing facility at Tarapur, near Mumbai in May
2001.
• The facility contained manufacturing plant with a
production capacity of 70,000 pieces per month and a
denim plant with a capacity of 20,000 pieces pm
12. Contd…
• After success of Pantaloon departmental stores
encouraged it to come up with retailing formats such as
‘Big Bazaar’, ‘Food Bazaar’ to retail food products.
• In 2001 PRIL opened its first ‘Big Bazaar’, which had an
area of 30,000 sq feet, in Kolkata.
• The major USP of the Big Bazaar was low prices and the
best price proposition being offered to consumers.
• As a part of its low pricing strategy the stores mainly
focused on unbranded products.
13. Contd…
• Big Bazaar sold around 200,000 items at discounts ranging
from 6% to 60%.
• In 2001, the first Food Bazaar store was set up in the Lower
Parel region of Mumbai.
• These stores were designed based on PRIL’s understanding
of the domestic needs of Indian housewives.
• The caption used for promotion was- “Ab Ghar Chalaana
Kitna Aasaan”.
• Food Bazaar was performing well when compared to
competitors like FoodWorld, Subhiksha and Margin Free.
14. Contd…
• It was reported Food Bazaar generated Rs. 2 billion in
gross revenues.
• It was reported that Food Bazaar stores achieved a cash break
even in the very first year of its launch, on the other hand it
took 6 years to Food World.
• As of 2005, the Pantaloon Knowledge Group had 3.5 million
sq.ft of retail space and over 100 stores across 25 cities in
India.
• It employed more than 12,000 people and had a customer
base of more than 120 million with a revenue of Rs. 10.73
billion (US$ 242 million).
16. THE ‘FUTURE GROUP’
• In March 2006:
Pantaloons renamed itself as ‘Future Group’
The new group was set up to drive growth through
consumer insights and scenario planning
Six business verticals
Future Future Future Future Future Future
retail space brands media capital logistics
17. Future group
Verticals Description
Future Retail Food & fashion
Future Space Management of shopping malls &
real estate
Future Brands Management of owned & licensed
brands
Future Capital Financial products & services
Future Media Focus on development &
management of retail media space
Future Logistics Deriving efficiencies through better
supply chain management
distribution
18. • Developed a B2b model
To strengthen its back-end supply chain
sourcing capabilities.
To reduce costs and to increase business
volumes.
19. • Increased no. of departments from 16 to 28
with an average area of 20,000 square feet.
• Launched 2 fashion stations, 4 Big Bazaar
hypermarkets and 6 new food bazaar stores.
• Able to generate a new market share in retail
industry.
• Able to cater in different consumer segments.
20. • Report released in 2006:
Ranked India First.
Considered as one of the most attractive
markets.
Retail Industry in India worth US$ 350
billion.
21. Vision Statement-
“We will provide Everything, Everywhere,
Every time to Every Indian consumer in the
most profitable manner.”
23. January 2005
– PRIL acquired 68% stake in apparel company Indus
League Clothing Limited (ILCL). The acquisition
cost the company around 240.9 million.
– ILCL owned popular clothing brands like Scullers
and Indigo nation.
24. Contd…
February 2005
– PRIL acquired 15.73% stake in Galaxy Entertainment
Corporation at a investment of Rs. 88 million.
Biyani said “Leisure and entertainment account
for over 6% of the aspirational consumer spent
and is growing rapidly. Galaxy will fill that need
for the aspirational customer”
25. Contd…
February 2005
– PRIL plans to acquire 49% stake in Planet Sports Pvt. Limited, a
sports goods and apparel retailing company, for Rs. 142million.
– Planet Sports was the sole franchise in India for Marks and
Spencers (UK based Retailer)
– It had distribution licensing rights for brands like Puma, Wilson,
Speedo and Converse.
PRIL entered the restaurant business
– Established PAN India Restaurant Limited with an investment of
90 million. Its focus was on quick service restaurant, food court
and hotels
26. Contd…
April 13, 2005
– Pantaloons food product( India)Ltd. Was incorporated as a
subsidiary of PRIL with a 100% stake at an investment of Rs. 50
million.
– It was the main supplier of food products to its food bazaar
stores.
September 2005
– PRIL stepped into retailing of footwear by forming a JV called
foot mart India Ltd. With Liberty shoes Ltd.
– PRIL holding 51% stake. it invested Rs. 127.5 million in the JV.
27. Contd…
January 2006
– PRIL announced to set up a NBFC with an
investment of 65 million to target credit and
insurance business.
– PRIL formed a JV with Gini and Jony Pvt. Ltd. For
the purpose of setting up a retail chain for kids
wear .
– PRIL had 50% stake.
28. Contd…
March 2006
– PRIL’s subsidiary ILCL formed a JV with UK based Lee
Cooper to distribute and sell Lee Cooper Brands at its
retail outlets in India.
– ILCL had 50% stake.
– PRIL begin to retail Lee Coopers brand from January
2007 after the approvals has been obtained.
29. Contd…
April 2006
– PRIL ventured into telecom retailing by establishing its wholly owned
subsidiary, Convergem Retail India Ltd. With an investment of 1 billion.
– It was operated through telecom retail formats such as Mport, M
bazaar, Gen M.
– It offered wide range of lifestyle electronic products such as car phone
accessories, cellular handsets , mobile accessories, cameras etc.
Neeran Chibber “Convergem retail plans to follow a three –
pronged strategy : shop in shop with their Big bazaar stores,
independent brand stores, and Kiosks in malls and multiplexes
catering to impulse buying”
30. Contd…
April 2006
– Pantaloon Group owned Kshitij real Estate Fund (KVC fund)
entered into a property acquisition deal with crossroads.
– The deal included crossroads mall space of around 0.12
million sq. ft. which was estimated to be around Rs. 350-
400 million
May 2006
– PRIL form a JV with Italy based Generali to form a JV called
‘Future Generali ‘ with 74% stake and an investment of Rs.
250 million
31. Contd…
May 2006
– PRIL ventured into online retailing by launching its
e-retail portal, futurebazaar.com
– New venture was part of Biyani’s strategy to
counter competition from leading e-commerce
portals in India like eBay, Rediff, Fabmail, and
Indiatimes.
32. Contd…
June 2006
– 50:50 JV with Talwalkars Better value Fitness Pvt Ltd.
– For retailing health and fitness products and services.
July 2006
– PRIL entered into an alliance with Ruchi Soya
Industries Ltd (RSIL) for expanding its refined edible oil
business through Food Bazaar.
33. Contd…
August 2006
– PRIL entered consumer durables retailing business
by entering into a JV with Videocon Industries
LTD.
– Future Bazaar owned brands ‘Koryo’ and ‘Sensei’
35. Contd…
• At the senior management level , the group hired
high profile executives from reputed
organizations like Goldman Sachs, Coca Cola
India.
• In addition to bringing in new talent at the senior
management level, PRIL also tied up with a few
management schools to create a management
talent pool for the lower levels of the
organization.
36. Contd…
• In April 2006,PRIL had tied up with four B schools
in India Welingkar Institute of Management ,K.J .
Somaiya Institute, Institute for Integrated
Learning in Management Delhi, Chennai Business
School to expand its talent sourcing pool by
establishing a course in retail management.
• PRIL also said that it had a lower attrition rate 8.3
% when compared to the retail industry as a
whole around 40 % to 50% per annum
38. Contd…
• According to report by KPMG the size of the
Indian retail industry was estimated at US $
200 billion in 2006.
• For the year ended June 30 2006,PRIL reported
a total Income of Rs 18.72 billion as compared
to Rs 10.88 billion in 04-05.
• The company also reported a 66.4 % rise in net
profit in the previous fiscal year.
39. Contd…
• The company’s growth momentum continued as
PRIL recorded a net profit of Rs 386.4 million for
the quarter ended September 30,2006.
• This was an increase of around 186 % over the
corresponding period of the previous year.
• In Feb 06, the Indian government allowed single
brand retailing in India upto 51 %.
40. Contd…
• In July 06,it was reported that WAL-MART
received permission from Indian government
to set up two liaison offices in India.
• Though these offices could not undertake
business operations in India, analysts saw this
as part of retail giant’s long term plans for
establishing operations in India.
41. Contd…
• Biyani was against allowing FDI in Indian
retailing sector .
• He said “since Indian retail is growing at over
40 %, FDI in retail is not urgently required as
Indian entities are growing this sector at a
rapid rate. The valuations of Indian retailers
would be better in a few years time”.
42. Contd…
• In order to compete with Reliance
and international retailers Biyani
entered into wholesale trading and
opened KBs Wholesale market
similar to WAL-MART’s Sam’s Club.
• Commenting on the new venture
Biyani said “We think there is a big
opportunity in changing the face of
wholesale trading in the country
just like we have done for retail.”
43. Contd…
• Biyani had plans to launch 18 formats and over
3340 stores thereby turning PRIL into a US $7
billion company with over US$1 billion in profits
by the year 2010.
• In September 06 Biyani planned to raise around
Rs 10 billion over the next 18 months.
• Biyani also planned to split his businesses so that
he could raise money separately from each
business entity.
44. Contd…
• A few industry observers were of the opinion
that despite Biyani’s anti FDI stance he would
have few options in future and so he may have
to form a venture with an international
retailer.
• Biyani was of the view that his aggressive
expansion plans were proof that he planned
to be in business for a long time.
