Image: Mexy Xavier
After establishing its stronghold as one of the largest retail conglomerates in India, the Kishore Biyani-led Future Group is now vying for a pie of the international market. The group announced a joint venture with Oman-based business conglomerate Khimji Ramdas LLC on Tuesday to open exclusive fbb (Fashion at Big Bazaar) stores in Oman.
The newly established joint venture company will be called KR Future Fashions LLC. “It is a 50:50 joint venture and both stakeholders have invested Rs 75 crore each as initial investment,” says Biyani. The first store will be operational by the first quarter of next year in Muscat, and the plan is to open 4-5 stores in the near term, and 17-18 stores over the long term in the GCC [Gulf Cooperation Council] region. The average store size will be around 15,000-20,000 square feet. All garments will be exported from India.
The Future Group has been betting big on its garments business over the last few years. “This financial year, we will sell about 30 crore garment pieces, and expect the garment business (inclusive of fbb, Central, Brand Factory and Cover Story) to contribute Rs 11,000 crore to Rs 12,000 crore in FY18,” he says. The target is to increase garment sales to 100 crore garments, which will contribute Rs 40,000 crore to Rs 50,000 crore to the total revenues in the next 4-5 years, he added.
This kind of target, says Biyani, is achievable only with international expansion. The focus will be on volume growth and on offering “value fashion”, as the fbb stores in Oman will be retailing at prices 5-8 percent lesser than in the Indian stores.
“We are primarily known for our premium businesses and this JV will allow us access to the mass and affordable market,” says Nailesh Khimji, director, Khimji Ramdas LLC.
Besides opening retail stores in Oman, Biyani says the JV will also enable Future Group to retail its own food and FMCG brands in Oman and in Gujarat by leveraging the strong distribution network of the Khimji Ramdas Group and source high quality dates from Oman. “The combination of our fashion know-how and KR’s local in-market expertise will get us closer to our goal of getting fbb to the helm of top 10 preferred international brands in India. We also plan to extend our partnership to our food and FMCG brands,” says Biyani. KR Future Fashions LLC will also look at expanding to other GCC countries subsequently.