RESTRUCTURING PANTALOONS RETAIL:THE FUTURE GROUP INITIATIVE

PRESENTED BY:
PRATEEK JAIN RAVI SHANKER SIDDHARTH BARUA

PARMINDER SINGH HORA PRAKASH BIJOUR KAMAL NARWANI AYUSH SHARMA

RACING WITH TIME

 In 2001 census , about 45% of the population was under age of 20

and 70 percent under age of 35.

Increase in disposable income. Increase In purchase trend Under Shed of middle And Upper Middle

class sector .

Dispersed Retail Sector.

Support from government to Ignite the Fuel For Over all Structural

Development of the country.

Global exposure.

Under The Heat

Threat from National as well as global retail Giants.
Limited Catchment area. Dominance of Unorganized sector.

Company Background Notes

Incorporated as Manz Wear Private Limited by Kishore Biyani on 12

October 1987, converted into a public limited company in September 1991, renamed as Pantaloon Fashions (India) Limited a year later. and thereafter into Pantaloon Retail (India) Limited in July 1999.
The company operates over 12 million square feet of retail space, has

over 1000 stores across 73 cities in India and employs over 30,000 people.
It captures almost the entire consumption basket of Indian customers. The

companys leading formats include :

Pantaloons - a chain of fashion outlets Big Bazaar - a uniquely Indian hypermarket chain Food Bazaar - a supermarket chain

Pantaloon Stores
In 1992, the company inaugurated its first exclusive mens

store called Pantaloons Stoppe.

In 1997, first departmental store called Pantaloon was

opened in the city of Kolkata with an investment of Rs 0.7 million.

Big Bazaar
In 2001,PRIL opened its first Big Bazaar in Kolkata.

The major USP of Big Bazaar was low price and value price

proposition offered to its customer.

Is se sasta aur accha kahin nahin

One stop shopping at discounted prices.

Food Bazaar

In 2001,the first Food Bazaar store was set up in Mumbai,

which focused on food and grocery products.

Designed on the basis of PRILs understanding of domestic

needs of Indian housewives.

Ab Ghar Chalaana kitna Aasaan.
Achieved break-even in the very first year of its launch and

within 2year, it had generated Rs 2 billion in gross revenues.

Future Group
In March 2006, the Pantaloon Group as a part of its restructuring &

expansion changed its identity to Future Group

Vision statement We will provide everything,everywhere,everytime

to every Indian consumer in a most profitable manner

The Future Group operated through 6 verticals:

Future Retail Future Brands Future Space Future Capital Future Media Future Logistics

Verticals in Future Group

Future Group - Verticals Future Retail Future Space Future Brands Future Media Future Capital Future Logistics Description PRIL`s retail business like food & fashion Management of all shopping malls & real estate Management of all owned or licensed brands Focus on development & management of retail media spaces Management of retail financial products & services Management of better supply chain & distribution

Business strategies for establishing new ventures:

Business strategy for establishing new ventures

Establishing subsidies

Joint Ventures

Acquisition of companies

New Subsidies

Old subsidies

The time line of new Business Ventures by Pantaloon

Year 2005Garment business. JanuaryAcquired 68% stake in Indus League clothing ltd. 1st Acquisition in the garment industry. Acquisition cost Rs. 240.9 million Benefits of scale critical mass required for growth in this space Popular brands scullery and indigo nation.

Feb 2005Sports Goods and Apparels. Plans to acquire 49% stake in planet sports Pvt. ltd.

Sports goods and apparel retailing company. Cost Rs. 142 mill. BenefitsSole franchisee of marks and Spencer
Brands like puma, Speedo and converse. Feb 2005Restaurant Business Entered restaurant business by establishing pan India restaurants ltd.

Investment of Rs. 90 million Focus on quick service restaurants, food courts and hotels

April 2005Food product Incorporated pantaloon food product ltd, as a subsidiary of PRIL. with 100% stake Investment of Rs. 50 mill. Maintain supplies of food products to its food bazaar stores.

Sept 2005Foot Mart

Joint venture with liberty shoes ltd. to form foot mart India ltd.
PRIL. holding 51% while liberty holds 49%. Invested Rs.127.5 mill.

January 2006-

Non Banking financial company

Announced plans to set up a Non Banking Financial Company. Investment of Rs.60 to 65 mill. Target insurance and credit sector

April 2006-

Telecom sector
Entered into Telecom sector by wholly owned subsidiary, Convergem retail India ltd.
Investment of Rs.1 billion. Operate through mortem bazaar, and gen m.

April 2006-

Real Estate

Kshitij real estate fund made an deal with crossroads.

Acquire .12 million sq.ft.

Investment of 350 to 400 million.

 The restructuring and expansion drive prompted Mr. Biyani to bring in new talent and professionalize the business. The group sought to utilize the expertise of the highly qualified and experienced executives to oversee the group's initiatives in various business sectors.

At the senior management level, the group hired high profile executives from reputed organizations like Goldman Sachs , Coca-Cola India, etc.

Some of the New Recruits at the Future Group

Recruit Sameer Sain Sanjeev Gupta Previous Post MD with Goldman Sachs in Europe CEO of Coca-Cola India Division CEO of Future Capital Holdings Indivision (Pantaloon groups private equity fund Indivison

Atul Kaput

MD and peincipal stategist of Goldman Sachs private equity fund Bharti President & CEO

Neeran Chibber

Communication Products (PRILs Retail Division) Head-Creative Research Team, Future Capital PHF Investment Advisory (Subsidiary of PRIL)

Roopa Purushothaman Shishir Baijal

Goldman Sachs Chief Economist & Strategist Inox Leisure MD & CEO

Recruiting New Talent contd.

In addition to bringing in new talent at the senior management level, PRIL also tied up with a few management schools to create a management talent pool for the lower levels of the organization. In April 2006, it was reported that PRIL had tied up with four business management schools in India 1. 2. 3. 4. Welingkar Institute of Management Development (Mumbai) K.J. Somaiya Institute of Management Studies and Research (Mumbai) Chennai Business School Institute of Integrated Learning in Management (Delhi)

It also had lower attrition rate (8.3 %) when compared to the retail industry as a whole (around 40 % to 50 % p.a)

The Size of the Indian Retail was estimated at US $ 200 Billion in 2006.

Financial Results:
For the year ended June 30 2006 ,Total Income of Rs. 18.72 billion as

compared to Rs.10.88 billion in 2004-05.

Company reported a 66.4% rise in the net profit, i.e Rs. 641.5 million

for 2005-06 as against Rs.385.5 million in the previous fiscal year. Sep.30 2006.

PRIL recorded a net profit of Rs.386.4 million for the quarter ended Increase of around 186% over the corresponding period of the

previous year.

Competitors:
PRIL faced competition from domestic competitors like Shoppers Stop & Trent Ltd.

FDI in India:
In Feb 2006, the Indian Govt. allowed Single Brand retailing in India upto 51%. Biyani was against allowing FDI in Indian retailing sector as he felt that the sector was still at a nascent stage.

Upcoming Competitor:
Reliance retail Limited. The competitor had already begun was evident from the fact that Reliance had poached Raghu Pillai from PRIL.

Countering Competition:
Biyani had plans to enter into wholesale trading. Biyani had plans to launch 18 formats & over 3340 stores. Turning PRIL into a US $ 7 Billion company with over US $ I Billion in Profits by the year 2010. He also planned to split his businesses for raising money separately from the business.

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