Pantaloon plans exit from Staples JV

Tuesday, 06 March 2012

In a bid to reduce its debt burden, Pantaloon Retail has now decided to exit its JV with the world’s largest office products firm Staples Inc by June 2012. This could fetch the retail giant Rs 200 crores. The move comes as a part of Future Group’s strategy to focus on fewer profit making businesses such as food and fashion.

After taking over the reigns of top positions in the group, the Biyani family is taking all corrective measures to make a comeback after debt and inventory pressures pushed the retailer way below its expectations. The group had indicated last year of its plans to sell non-core assets such as Future Capital Holdings and the life insurance venture that it operates in partnership with Italy’s Generali.

The company has also held back its rapid expansion plans and is concentrating on gaining core strength. Though in 2008, it entered into a joint venture with French apparel firm Celio while they announced another 50:50 joint venture with UK footwear brand Clarks, in 2009, the Paris-based fashion retailer Etam decided to withdraw its 50:50 joint venture with the Future Group to focus on its core European market. Pantaloon added just 1.49 million sq. ft. of retail space, taking the total to 16.3 million sq. ft. in the second quarter ended December 2011. While, the company, in its 2011-12 annual report, had said that they plan to raise their total retail space to 25 million sq. ft. in three to four years, from 15 million sq. ft. at the end of the last financial year.

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