Every Indian would have stepped inside a Future Retail store at least once in their lifetime. Doesn’t sound familiar? Does Big Bazaar ring a bell? Future Retail held ownership of many famously successful hypermarkets and retail chains, including Big Bazaar, Nilgiris, FBB, Pantaloons, Brand Factory, and Heritage Fresh. The company had over 1500 stores in around 400 cities. It was initially buoyant, with sales skyrocketing and shares escalating.
But now, the Future Retail empire is crumbling into pieces with its Managing Director Mr. Rakesh Biyani and a few other officials stepping down. Shocking, right? Many reasons have been cited for its downfall, including the company’s failure to submit to the e-commerce wave, unplanned rapid expansion, and evasion of lease payments. The company started facing a downfall, and soon its debts accumulated in crores and crores.
The Reliance takeover:
Reliance Industries then chimed in and took over some of the stores previously under the flagship of Future Retail, owing to its failure to make lease payments. Reliance took over the stores, rebranded them, and let them on sub-lease. However, the Future group, neck-deep in debt, wasn’t able to make the sub-lease payments on time either. Consequently, it has led the Reliance industries to take critical measures.
The company has given a notice that it has no choice but to terminate the sub-lease of over 900 Future Retail stores it had previously taken over. These stores have been contributing around a whooping 55-65% of the company’s revenue, and their termination could further debilitate the Future Group of Industries. Other than that, around 200 stores have been completely acquired by the Reliance group. They will be completely rebranded and operated as Reliance hypermarkets and such.
Importance of Lease management:
So what led to the downfall of such a booming retail company? While experts point out various grounds, we’d like to shine the light on its failure to make timely lease payments. Initially, one of the reasons for its collapse was lease evasion. Further, though the company was given an opportunity to make amends in terms of sub-lease contracts, it failed to make timely payments, which led to the termination of around 900 of its flagship stores.
Lease payment is identical to monthly rent that is agreed upon by two parties. Here, one party is granted the legal right to use the other party’s property, space, equipment, or even software for the contracted period. It is important for any company, small or large, to prioritize and manage its lease payments. Lease management would help in improving your credits and also protect your company from lease evasion.
Lease Portfolio 365 - the ultimate lease manager:
Lease portfolio 365 is a cloud-based lease management software that helps companies manage their lease payments, property-related documents, and other data and reports. We serve companies by managing their reports, integrating their data, and sending timely notifications regarding lease payments. Our services extend to a variety of sectors, from supermarkets and hypermarkets to banking and pharmacies.
Lease management software like Lease portfolio 365, takes a huge weight off your shoulders as they take up the responsibility of managing your entire property-related requirements. Lease Portfolio 365 also offers a free demo that you could book directly from our website.