Kishore Biyani will introduce his fashion brand FBB and add private labels as part of his plan to turn around loss-making Hypercity chain.
Biyani plans to use more space to sell high-margin clothing items, he told BloombergQuit in an interview. That's what gives his Future Retail Ltd. 35 percent of its revenue, more than twice of Hypercity.
Future Retail acquired the 19-store hypermarket chain for Rs 655 crore from promoter Shoppers Stop Ltd. and other shareholders. The acquisition fits into Biyani's expansion plan as he bets on growing consumption in Asia's third largest economy. Future Retail has already lined up more Big Bazaar supermarkets and smaller Easy Day outlets.
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Also Read: Kishore Biyani Acquires Hypercity For Rs 655 Crore From Shoppers Stop
The retailer expects Hypercity to increase its revenue by 8-10 percent, with the chain contributing at least 13 percent of its total sales. Biyani also plans to convert three or four Hypercity stores into premium Big Bazaar Gen Next outlets, and will not add more under the hypermaket brand.
Shoppers Stop, which recently sold 5 percent to Amazon India, is now betting to get 10 percent revenue of its namesake lifestyle stores from online sales.
The Hypercity sale will reduce its debt by half in two to three quarters, said Govind Shrikhande, managing director at Shoppers Stop. The retailer had Rs 492-crore debt as of June.
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