Future Grp Final

8/2/2019 Future Grp Final

1/31

Mrinalini Kulkarni 26Sai Mandlik 30Mansi Modi 36Pankaj Singh 53Manusrestha Sinha 55Neha Tare 60


2/31

RETAIL INDUSTRYAcc ounts for 1/3 rd of India's GDP and employs around 4 lakh people.

Fastest growing se c tors with a C A GR of 5%

It is expe c ted to grow 25% annually and be worth US$ 175-200 billion by2016.

Organised retail is just 5% of the Retail

Se c tor and is worth Rs 95000 c r

Driven by1. c hanging lifestyles

2. strong in c ome growth3. favourable demographi c patterns4. in c rease in young working population

5. nu c lear families in urban areas

6. in c reasing working-women population7. in c rease in disposable in c ome and c ustomer aspiration8. in c rease in expenditure for luxury items.


3/31

H ISTORY OF FUTUREGROUPFounded by Mr. Kishore Biyani, known as Indias Retail king

1987: He laun c hed his own brand of fabri c for mens trousers c alled WBB(White, Brown, Blue)

1994: He started a garment manufa c turing c ompany c alled Manz wear

Private Ltd. A nd sold the garments under the brand name Pantaloon1991: First Pantaloon shoppe opened in Goa1994: Pantaloon had a turnover of Rs.9mn1996: Pantaloons department store opens in Kolkata in a 10000 sqft store2001: First big bazaar opens in Kolkata and 2 more open within 22 days

2002: Food Bazaar was laun c hed

Sin c e then, along with the retail se c tor, the c ompany has also expandedinto other fields su c h as insuran c e and media.


4/31

TODAYOver 9mn sqft of prime spaces has been booked in thelargest cities.Companys share of Indias GDP is 0.1%Grow to 3.5mn sq feet of space in the next 3 yrs

An incremental turnover of Rs.2500 Cr on a limited capitalof Rs.620 Cr in 2009-102010 representing a CAGR (revenue) of 29.4% over the last3 years.These were reflected in the Same Store Sales Growth(SSG)which showed healthy trends across the segments of lifestyle (13.6%), value (9.5%) and home (12%).


5/31

F INANCIALS


6/31

FUTURE GROUPObjective - of being a premier c atalyst in Indias c onsumption-led growthstory

Current Objective- to divest as far as possible all nonretail businessesand consolidate all retail businesses.

The company divested its interests in subsidiaries involved in brand

building, technology and knowledge services, training and manpowerdevelopment and mall management and property services. Focus on maintaining cash flows, increasing margins and improving

D/E ratio.Retail forms the c ore business a c tivity of future group.

Retail thrust is fo c ussed on four prin c ipal verti c als of Food, Fashion,General Mer c handise and Home (together a cc ount for nearly 65% of the c onsumption)

Group subsidiaries are present in leisure and entertainment, branddevelopment, retail real estate development, retail media and logisti c s.

Group c ompanies offer c onsumer finan c e and insuran c e to c ustomers,

as well as c orporate loans and equity investments to c ompaniesengaged in c onsumer businesses.


7/31


8/31

7 P S OF PRIL1. Produ ct:E -c ommer c e: Futurebazaar.com

Food

Fashion: Blue Sky, Central, Etam, Fashion Station, Gini & Jony, Navaras, Pantaloons , and Top 10.Home & E le c troni c s: Collection i ; Electronics Bazaar ; e-zone ; Furniture Bazaar ; Home Town .

General Mer c handise : Big Bazaar ,Shoe Factory,Brand Factory,Navaras,KBs FairPrice ,Central,

Leisure & E ntertainment:Options are : Bowling Co .

Wellness & Beauty: HealthVillage , Star & Sitara ; Tulsi ; Turmeric .

Books & Musi c : Depot 2 . Pr ice: Value and premium pri c ing3. Pla ce: The c ompany operates over 12 million square feet of retail spa c e, has over 1000 storesa c ross 71 c ities and 65 rural c ities. It is targeting the Tier-2 and 3 c ities whi c h has a hugeunleashed potential.4. Promo ti on : They use magazines, newspapers, television, radios , hoardings, internet et c forpromoting the brand . They have joint ventures and allian c es with many c ompanies. SeasonalDis c ounts , Sales Dis c ounts during Festivals are offered to attra c t c onsumers.

5. P e opl e: FMCG employees.The c ompany follows a multi-format retail strategy.6. Pro cesses: It has implemented S A P to build a robust transa c tion managementsystem

7. Phy sic al E vi d e n ce: It has a huge list of awards, re c ognition in its kitty like Most A dmired Fashion Group Of The Year, Most A dmired Food & Gro c ery Retailer Of The Year ,Most A dmired Food Court , Most A dmired Retailer of the Year, ,Most A dmired Food &

Gro c ery Retailer of the Year Supermarket


9/31

SWOT

STR ENG TH

Large brand equity- largest marketshare and c apitalization.

Various pri c e points

High varian c e under one roof

Financ

ially strong

W EAKNE SS

Multi diversified businessNo global presen c e

No bargaining markets

Weak Loyalty program

Rising debt

De c reasing margins/liquidityTHR EA T

o Competition-FDIo Resistan c e from small retailerso Government poli c ieso Ma c ro e c onomi c c onditiono Inflationo Pri c e wars between c ompetitors

O PP O RTU NI TY

o In c reasing spending powero Demographi c advantageo 72 festivals-buying spreeo E

ntry of new player-market expansiono Organized growing at the rate of 25-

30% p.ao Global strategi c allian c eso Diversifi c ation opportunities-Rural

Retailing


10/31

Pantaloon Retail (India)Limited

Future ValueRetail


11/31


12/31

PARTNERS H IPS


13/31

Line of Business Lifestyle Value

Fashion Pantaloon, Central,M&S, Guess, Debenhams

Big Bazaar, Fashionstation

FoodFood Bazaar

General merchandise Big Bazaar

Books and stationary Depot Big Bazaar

Specialty retailing-apparel

Blue sky

Jewellery NavarasHome Home Town, E-zone,

CollectionFurniture Bazaar,Electronic Bazaar, Got IT

Leisure andEntertainment

Bowling Co., Rain,Sports bar, Food stop,

F123

Bollywood caf, Chamosa, Your kitchen, fuel

Communications M port, Gen M M Bazaar

Health beauty andwellness

Health Village, ManipalCure & care, Talwalkars

Star & Sitaara

E-Tailing Futurebazaar.com

Footwear Shoe factory


14/31

STRATEGY

Future Group's strategy is aimed at a c hieving in c lusive,sustained and profitable growth with three levers

Cu st om e r-or ie n ta ti on

" know your c ustomer "

C on ti nuou s -inno va ti on

provide diverse c ustomer groups with refreshinglydifferent retail experien c es.

C olla b ora tive t ran sf orma ti onc ombining our strengths with our suppliers and vendors


15/31

Net in c rease in retail spa c e was 2.26 mn sqft, taking the total operationalspa c e to 15.24 mn sqft

Turnover for 2010-11 showed a 24.8% in c rease bringing it to Rs 14485 c rfrom Rs 9787Cr

2010-11


16/31

OUR RETAIL COVERAGE


17/31

Retail space increased to 6.43 mn sqft from 5.22 mnsqft

SPACEEVOLUTION


18/31

Retail space increased to 8.8 mn sqft from 7.76

mn sqft


19/31

No. of stores

Retail space


20/31

P ANTALOON RETAIL (INDIA) LTD15 million sq feet of retail spa c e

Serves c ustomers in 85 c ities and 60 rural lo c ations a c ross India

1,000 stores a c ross 71 c ities in India and employs over 30,000 peopleA s of 2010, it was the c ountry's largest listed retailer by marketc apitalization and revenueA round 220 million c ustomers walk into our stores ea c h year and c hooseprodu c ts and servi c es supplied by over 30,000 small, medium and largeentrepreneurs and manufa c turers from a c ross India

partner with over 30,000 suppliers a c ross mer c handise c ategoriesE mploys about 35000 people

With effe c t from 1 January 2010 the c ompany separated its dis c ount storebusiness, whi c h in c ludes the Big Bazaar hypermarket and the FoodBazaar supermarket businesses, into Future Value Retail Ltd.

Revenue is Rs. 6,019.00 c rore


21/31

B IG B AZAAR

210 stores a c ross 80 c ities and towns in India.

Most Big Bazaar stores are multi-level and are lo c ated in stand-alone buildings in c ity c enters as well as within shopping malls.

These stores offer over 200,000 SKUs in a wide range of c ategories

led primarily by fashion and food produc

ts.Customer c entri c -Fresh merchandise and assortment planning,visual merchandising, and innovative services, complimented newand innovative communication, marketing and loyalty initiativesto bring in new customers and acquire a larger share of spendingfrom existing customers.

Type of store Area (sq ft)

A typical store 50000

Family centres (in metros) 75000-160000

Express stores (smaller towns) 30000


22/31

LOYALTY PROGRAMMES

Membership is freeBenefits such as instant discounts, complimentaryparking, shipping and home drop, relaxed returnpolicy and exclusive sale preview.

Pantaloonsgreen card

Europes leading customer loyalty programIn India, it has 30 partners, 1500 outlets and 10mncard members.

Accumulation of points across future group formatswhich can be redeemed for air miles, movie and airtickets, etc.

Paybackloyalty

program

Developed in partnership with Tata TeleservicesCustomers will get shopping benefits for talking and talk-timebenefits each time they shop.customers will be rewarded with free talk-time for everypurchase above Rs 500 made at Future Group shopping outlets

T24program


23/31

M AJOR COMPETITION

Incorporated in

1991

Department stores,specialist-books,home products,cosmetics, F&B,

baby care,accessories

Shoppers Stop,Crossword,

HomeStop,MotherCare, MAC, Brios,

Arcella

Incorporated in1998

Apparelstores,specialty

Books, music,hypermarket

Westside,Landmark, Star

India Bazar

Incorporated in2006

Hypermarkets,supermarkets,conve

nience stores,specialty retail

Reliance Fresh,Reliance Mart,

Reliance Digital,RelianceTrendz,

Reliance Footprint,

Reliance Jewellery


24/31

FOOD

Opened 26 food bazaar outlets this year and the 200th

KBs fairpric

e store.Laun c h of FoodHall, c atering to the evolved set of c onsumers

investing in sour c ing, sorting, pa c kaging c enters and as well as an effi c ientlogisti c s network in c luding c old c hains a c ross the c ountry

experimenting with produ c t, servi c e and design innovations in the food business.

Offering imported varieties, loc

al brands, largerc

hoic

e of fresh vegetables andfruits depending on the lo c ations

In c reasing thrust on pre c ut or ready to use vegetables

Plans to set up to open a state of the art integrated food distribution c entre outsideMumbai equipped with on- c onveyor sorting, put-to-light supply c hain pro c ess,roll- c aged based store delivery and similar te c hnologies.

Plans to open 15 KB fair pri c e stores every month as it is a key part of the growthstrategy


25/31

12 flagship home town stores a c ross 1.15mn sqft

Design and build servi c e (provides assistan c e)

Partnerships with key developers to offer fully furnished houses

Building its own brands that provide more value to c ustomers at

the lower end of the marketPlans to open satellite stores to work with builders and hometownexpress(within malls) and HT Design & Build stores.

25 new home c ategory stores to be opened in 2012


26/31

3.03mn green c ard members c ontributing to 55% of sales.

13 new pantaloons stores added, operational spa c e now 1.74mn sqft

6 new Central stores, operational spa c e now 2.59mn sq ft

Happiness sale, youthopia c ampaign, c ity spe c ific initiatives byCentral.

Implementation of the automati c replenishment systems a c ross thesupply c hain that helped improve produ c t availability


27/31

for the first time in India, a 48 hour non-stop shoppingextravaganza and also developing new store designs to c reate aSee, Tou c h and Feel environment, from engaging c ustomers withlive demonstrations of produ c ts to personalized attention.

Private brands Koryo and Sensei offer produ c ts a c ross 45mer c handise c ategories.E zone offers 6000 SKUs giving it a strong c ompetitive edge

Plans to introdu c e a new after sales servi c e verti c al


28/31

Positioned as a deal based website, the platform is c urrentlyattra c ting over 1 million unique visitors every week.

a c quisition of Chaupati, a phone-based c ommer c e start-up. Thebusiness is set to handle 10,000 orders on a daily basis.

Detailed roadmap for setting up a digital retailing business thatc an potentially c ontribute over 15% of the groups total businessand c apture atleast 15% of the total e c ommer c e business in India

within the next c ouple of years.


29/31

Handled by a spec

ialized subsidiary of thec

ompany, Future Supply Chain Solutions Ltd(FSCSL).

FSCSLs c onsolidation of warehousing spa c e has also been to derive maximum benefit from theup- c oming GST regime.

The c ompanys transportation network now operates on a robust hub-and spoke design,stru c tured with 12 transportation hubs and 40 bran c hes a c ross the c ountry, with a fleet strengthof 1600 vehi c les.

Brands need to have multiple distributors a c ross multiple lo c ations making the pro c ess timeand c ost ineffe c tive. To bridge this gap, FSCS has started Brand Distribution Servi c es (BDS),leveraging on its existing c apability of providing supply c hain servi c es to the extensivenetwork of the c ompanys stores.

To meet c hallenging needs of the fast growing retail business, in the next year, FSCS willc omplete WMS implementation for other business su c h as food, furniture and ele c troni c s,bring in Put-to-Light system at 3 additional Fashion and General Mer c handise DCs, fit its fleet

vehi c les with GPS/ V TS systems and c reate a large integrated Food DC for storage, pro c essingand distribution of staples, FMCG produ c ts along with fresh fruits and vegetables.E fforts have been made in terms of IT integration, SKU rationalization, vendor management,

warehouse optimization and transportation network ensuring a seamless integration betweenall partners in the value c hain. A s a result, we have seen improvements in the fill rates andturnover rates at the store level, thereby improving margins and turns. The c onsequen c e of these effi c ien c ies c an be seen in the robust SSGs the c ompany has re c orded in the variousc ategories.


30/31

K EY RIS K S ON FINANCIALS

Slow Revenue growth due to roll out delays and poor same store growth-

due to delays by developers.c an lead to c ost out c ome and also impa c t PRIL as malls will not be viable unless all

tenants are tied in.Continued sharp de c line in the same store sales in the future will be a risk to the

c ompanys growth.

Pressure on margins due to c ompetition c at c hment areas are shrinking and the PSFP A s are not s c aling up as expe c ted.Shortage of quality retail spa c e, leading to spiralling rentals, underdeveloped

supply c hain, and rising employee c osts.

Ma c ro slowdown c

ould hamper the domestic

c

onsumption trends and result in lower footfalls.

Rising share of Debt Company will have to depend primarily on debt for funding growth.Steep in c rease in c ost of borrowing c an impa c t the profitability of the

c ompany


31/31

TH AN K YOU

Documents

Future Grp Final