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PANTALOONS-India’s To Pantaloons Fashion IPO Franchise format 1st Retail store

1st formal trouser brand Ltd Distribution opened

1987 1991 1992 1994 1997

ROADMAP International ‘Retailer Of the Year’

Big
Bazar
1987-2019 Separated from Future Group

2009 2007 2006 2001

Food Hall
2011
1/3rd share of F&G market Launch Sabse Sasta Din
SHAKTI
New Retail 3.0 Hometown
Setting future goals

2012 2019
Home delivery
services in Mumbai
2014 2017 2020
49% share by Amazon
Partner with Amazon 7-11 agreement 02
Big Bazar Easy Day

FBB Food Hall

 Macro-
Economic
Overview
 Consumer
disposable income
improves retail
spending

Disposable income is
influenced by:

• Low inflation

• Low interest rates

• Economic growth
 INDUSTRY OVERVIEW
Organised Retail Sector Market Size (Rs. Billion) ORP (%)
Food & Grocery 1,192 3.6%
Apparel 1,444 24.9%
Footwear 257 17.6%
Furniture & household 124 7.1%
equipment
Pharmacy 87 7.6%
Consumer Durables 1,547 26.4%
Books & music 50 5.7%
Others 1,654 13.2%

Total Organised Retail 6,354 10.6%

Source: CRISIL
 Marketing Location

GROWTH Technology
Formats
&
DRIVERS Verticals

Customer
Support& Taste &
Infra preference

Source: CRISIL
• High growth dependence on • Fierce competitive rivalry
suppliers Threat • Players focus on low cost
• Cost efficiency Of leadership
• High dependence to meet New • Low differentiation
customer demands Entrant • High capital investment
• High customer demand
translates to more bargaining L • Favorable location

power

Supplier Competitive Buyer

Power H Rivalry L Power

• Low margins
• Local kirana stores H • Small size of individual
purchase
• Low differentiation Threat
• Low customer loyalty Of
Substi
tute
 Big Bazar

WHSmith
Cost Cost
FBB
Leadership Focus
PORTER’S Food Hall

GENERIC Easy Day

STRATEGIES Food World

Differentiation Differentiation
Hyper City
Leadership Focus
Heritage Fresh
 LEGAL POLITICAL
• Legislative obligations before • FDI norms
opening the store • Taxation policies
• International Laws • Stringent government regulations on
• legal proceedings & claims from
customers P safety of consumers & quality of products

ENVIRONMENTAL
L E ECONOMIC
• Use of raw materials Analysis • Inflation rates
• Proper ways to dispose e- • GDP growth
waste
• Carry bags
E S SOCIAL

TECHNOLOGICAL
T • Corporate social
responsibility
• Consumer preferences
• Online shopping
• Lifestyle changes
• Disruptions due to big data, AI,
block chain
 COMPANY PERFORMANCE (FY19)
SCALE 1,511 16.1 mn Sq.ft > US$ 3.1 Bn
Stores Retail Space FY19 revenue

EFF 26.7%
Gross Margin
5.2%
EBITDA
6.8% Overall
5.8% Big Bazar SSSG

428
DEPTH >350 mn
Customer footfall Cities
39*
States

VALUE ~ 18% ~75% 99%

Revenue Growth Growth in oper profit Growth in earnings
 FINANCIALS HIGHLIGHTS
PARTICULARS MARCH-15 MARCH-16 MARCH-17 MARCH-18 MARCH-19
Operating
Revenue 1,779.42 6,844.96 17,075.09 18,477.97 20,164.90
Gross Margin% 11.7% 26.0% 24.8% 25.6% 26.7%
EBIT -358.98 64.30 572.51 790.56 956.79
Net Profit -379.21 14.55 368.28 11.31 732.81
Total Revenue 1,849.45 6,860.47 17,098.89 18,489.64 20,185.37
Revenue per
store 9 19 18 13
Revenue per sq.
feet 5,319 12,373 12,743 12,533
 OTHER PLAYERS
Revenue Per square feet(In INR)
Inventory Turnover Ratio
35647
14.9 14.6 32719
14.4

13662
12743
4.57 4.18 4.18
3.72 3.98 3.98

805 823

2017 2018 2019 V-Mart Avenue Supermart Future Retail

V Mart Avenue Future Retail 2018 2019

 RECENT STRATEGIC MOVES
 May 2017- retail Business of Heritage Foods Limited
 Nov 2017- Hypercity Retail India Limited is a wholly owned subsidiary
Mergers and  March 2018- Foodworld Supermarkets Private Limited
Acquisitions
 May 2018- Travel News Services India which holds the license of global retail
brand WH Smith in India
 February 2019- Acquires the master franchisee of 7-Eleven. Acquires SHME Food
Brands Private Limited to open new stores under the brand
 January 2020- Amazon acquires 49% of Future Coupons

 August 2017- transfer of its home retail business Home Town to Praxis Home
Retail Limited

Demergers
 RISKS FACED
◦ Various reorganization activities due to which historical financial information may not be comparable &
cannot be reliable as an indicator of historical & future results

◦ Debt covenants restricting the growth of the operation

◦ Business subjective to seasonal and cyclical volatility. Forecasts are dependent on changing fashion
trends & buying patterns which in turn depends on overall economy & festive occasions

◦ Optimal inventory requirements due to its perishable nature. Dependent on relationship with the
supplier

◦ Dependence on single supply chain solution & logistic provider

◦ Prime location to open store in competitive cost with favorable lease rental conditions

◦ Dependence on Big Bazar generating a significant portion of revenues

Source: SEBI
 No
Shutting acquisition

TARGETS non-
profitable
store

IMMEDIATE EXECUTION Low

Inventory
Days

STRONG CASH-FLOWN GENERATION

TARGETS 7-Eleven
Franchise

NEAR-TO-MEDIUM TERM Amazon

REAPING BENEFITS FROM TIE-UPS

BUSINESS
MODEL
Key Partners Key Activities Value Customer Customer
Proposition Relationship Segments
• 24/7 active
• Amazon • Online platform customer • Mass market
• Omni channel
• 7-Eleven design and support • Mobile friendly
presence
• SAP Labs operation • Social • Working
• Strengthen O2O
• Future • Order servicing messaging user Professionals
• Move from
Supply • Marketing interface • Students
monthly to a
Chain • Medium and
weekly visit top-
Solutions Key Resources Channels High Income
up
• Suppliers brackets
• Distribution • Physical stores
channel • Loyalty
• Small format program
stores • Amazon
• Customer Data website
analytics

Cost Structure Revenue Streams

• Economies of scale • Sales Margins ,

• App development, running and maintenance • Annual Subscriptions
• Logistics • Multi-brand Advertisement
• Small stores in most neighbourhoods
 SOURCES
◦ https://www.sebi.gov.in/sebi_data/attachdocs/1407129358722.pdf
◦ https://www.livemint.com/Companies/9QOVypcTwvcoshZGUPBUYI/Smallformat-stores-will-drive-Future-
Groups-growth-Kishor.html
◦ https://www.business-standard.com/article/companies/we-have-committed-mistakes-says-future-group-
ceo-kishore-biyani-119022601281_1.html
◦ http://www.competia.com/50-competitive-intelligence-analysis-techniques/
◦ https://www.crisilresearch.com/#/industry/retailing/ourview
◦ https://www.crisilresearch.com/#/industry/retailing/industryUnderstandingDetails
◦ https://www.crisilresearch.com/#/industry/retailing/companyProfileView/FURELTSLA
◦ https://www.crisilresearch.com/#/industry/warehousing/companyProfileView/FSCSCL
◦ https://www.futureretail.in/pdf/Investor_Presentation_12.12.2019.pdf
◦ https://www.stratechi.com/strategic-planning-process/
THANK YOU / QUESTIONS?