What’s poppin’ — the prolonged Future Retail and Reliance saga has reached an interesting turn, where the cash-strapped Future is now accusing its savior Reliance of forcibly taking control of thousands of its stores, vowing to take them back.
Some context: Future Retail, crushed under its debt load during COVID, had sold itself for $3.4 billion to Reliance Retail in 2020. But Amazon alleged that the sale violated an old old arrangement it had with Future, which gave them the first right to buy the company, if a sale were to ever happen. The trio have since battled it out in almost every court there is this side of the Indus.
Meanwhile, Future’s coffers are drying up fast, and the business started missing its lease payments to landlords among a million other obligations. Scared landlords reached out to Ambani to save them from going down.
Reliance acted, and slyly started seizing control of some of Future’s 1,700 retail stores. Reliance went over and onboard, even offering employment to store employees without any problems — all while the case was still in dispute.
Now Amazon stands double crossed, and Future Retail is a retail empire with no retail locations to hang its clothes on! Show me a better modern day heist!
What now — RIL, legally has full control of the stores, unless Amazon or Future proves bad behavior in court. Future, minus stores, capital, or a godfather, cannot afford to drag out a legal battle. Meanwhile out of court settlement talks have stalled. Bezos is busy baking cookies, while new guy Andy Jassy is proving a rookie for Mota bhai’s tactics.
Big picture — Reliance has somehow made certain that there won’t be any winners from this other than themselves. Stock was up 1.5% yesterday.