IndiaRetailBiz

Future group, the country’s largest multi-format, multi-segment, multi-products retailer, according to its Chief Executive Officer Kishore Biyani, is ready to more than double its business and retail carpet area in the next four years. Biyani was talking about his future plans with PTI.

The retail carpet area will go up from 12 million sq ft at present to 30 million sq ft at an investment outly of Rs 3,000 to 4,000 crore ($600 mn to $800 mn), says Biyani.

The group’s retail business, expected to cross Rs 10,000 crore (over $2 billion) this year, will also grow to Rs 25,000 crore (over $ 5 billion) in the next four years.

“We will be a very dominant player in the consumption business with around Rs 25,000 crore of sales in next 3-4 years. That is quite meaningful and impactful,” said Biyani, adding that the group would clock a turnover of Rs 10,000 crore this fiscal.

Resources for required for fueling the targeted growth will not pose a problem as the group can leverage on its current financial strength as reflected through its low debt:equity ratio of 1.2. ‘Gearing’ (or debt:equity ratio) of a business indicates its ability to raise resources through borrowing. Lower the ratio, better the capacity to borrow as the business capable of servicing its financial obligations.

On being asked about the resources, Biyani said, “We can leverage substantially.” According to Biyani, the group would look at different options, including selling of non-core assets.

Talking about profitability, Biyani said, “We will have earnings before interest depreciation taxes and ammortatisation (EBIDTA) margin of eight to ten per cent of the Rs 25,000 crore turnover. You can calculate how our profitability will be.”

The retail business post expansion would, therefore, be able to generate cash surplus of Rs 2,000 to Rs. 2,500 crore per year, subject of course to payment of taxes and disbursement of dividend to shareholder, if any, against the same.

Future group through its retail arm Pantaloon Retail India Limited currently operates several multi-format, pan-India retail chains across ‘value,’ ‘lifestyle,’ and ‘home retail’ segments. Pantaloon currently operates over 1,000 stores in 71 cities and 65 rural locations across India.

Among several large pan-India retail chains operated by the group include: Pantaloons (flagship, department store format, lifestyle, fashion, chain), Big Bazaar (hypermarket format, general merchandise, value, chain), Food Bazaar (supermarkets style, value, food chain), Central (chain of seamles destination malls), e-Zone (speciality format, durables, lifestyle, chain), Brand Factory (fashion, value chain selling braded apparel at factory ‘gate’ prices), Ethnicity (ethnic, fashion and home products, lifestyle, chain) and Home Town (home retail) chains. The group is also operating ‘Aadhaar’– a rural retailing chain.