Future Value Retail to start functioning from Jan 1

Future Value Retail to start functioning from Jan 1

The BSE-listed company has completed all formalities and gained shareholder approval through a postal ballot to hive-off this segment, PRIL Managing Director Kishore Biyani said  on Wednesday.

"The postal ballot and other processes are complete and we are looking at January 1 as the starting date for Future Value Retail," Biyani told reporters on the sidelines of a conference here.

Supermarket Food Bazaar and hypermarket Big Bazaar constitute up to 55 per cent of PRIL's total revenues.

"At the company level (PRIL), we are expecting growth to jump by 30-40 per cent," Biyani said, indicating that the Indian retail industry has finally crawled out of the woods.

The company has plans to open 140 Big Bazaars and Food Bazaars over the next 4-5-years in addition to the 120 stores it already operates across the country.

Biyani said Pantaloon Retail will spend close to Rs 400 crore in the remainder of this fiscal (till June 2010) for expansion.

The company plans to open 10-12 stores of its lifestyle format-- Pantaloons-- in various parts of the country as a part of its capital expenditure.

The company has also decided to concentrate on its neighbourhood store format, KB's Fair Price Shop, which will be rolled out only in Mumbai, Delhi and Bangalore.

"With respect to KB Fair Price Shop, we have moved out of all other cities and are concentrating only on the three cities of Mumbai, Delhi and Bangalore. The idea is to open around 1,200 stores in this format," Biyani said, without specifying the time-frame for this expansion.

The company is shutting down unviable stores of KB Fair Price Shop in other cities and claims to have made the format profitable through this move.

On food inflation, Biyani said that the company may increase prices of its private food labels if inflation keeps on mounting consistently in the short-term.

"Inflation has been quite severe and quite high," he said, adding, "however, I don't think in the next three months, there will be any increase in prices (of our private labels in food) but if consistently there is pricing pressure on products, there may be a change in pricing," Biyani said.

The company has registered an average growth of 20 per cent across all its formats since Diwali and expects to see a growth of 30-35 per cent in the next two months, he said.

Biyani said Future Group has already started the process of consolidating its financial services business under one umbrella and expects to execute the whole process within the next 4-6-months.

"We want to consolidate our financial services business (Future Ventures, Future Money, Future Capital Holdings and Future Generali) in one single place. It depends on a lot of regulations. The process has started and we want to complete it in the next 4-6-months," he said.