“We got into a trap to be very honest with COVID-19. In the first 3-4 months, we lost nearly Rs 7,000 crore of revenue” – said Mr. Kishore Biyani at a recent conference. As per him, the chances of economic survival at Future Group were waning rapidly due to lockdowns imposed. The rental costs and interest liabilities didn’t stop. Biyani admitted that the group had made far too many acquisitions over last 6-7 years, adding to huge debt pile. As a result, there was little other hope but to exit the business altogether and pay of the debt.
Biyani worded a warning that the worst for retailers is yet to come. According to him, the business models around are designed to be profitable when achieving 90% of the targets. If achieved less due to economic shocks, the business becomes difficult to sustain.