Future Group buys Sangam Direct chain
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Indian retail giant Future Group has bought Sangam Direct, a chain of grocery stores previously known as Sabka Bazaar, from Wadhawan Retail Ventures.
Future group CEO Kishore Biyani has announced the deal without disclosing any figures.
It is Future Group’s third acquisition in northern India in the food and groceries space in the past three years after Big Apple and EasyDay. In the south, the company acquired Nilgiris last year and is in talks to buy the retail business of Heritage Foods.
Sangam Direct and Heritage Foods will add Rs800 crore (US$120 million) to Future Group’s annual revenue, says Biyani.
Heritage Foods, which has 114 stores in Bengaluru and Hyderabad, reported revenue of Rs582.9 crore for 2015-16, up 18 per cent. Sangam Direct, which has about 35 stores across Bengaluru and Delhi, was started by Hindustan Unilever in 2001 as its online groceries delivery platform. It was acquired in 2007 by the Wadhawan group, which owned the Spinach retail chain.
Future Group, through Future Retail and Future Consumer Enterprise, has about 800 stores. About 500 are small-format EasyDay and Nilgiris convenience stores, the rest being the larger-format stores of Big Bazaar and FBB, which is the group’s fashion retail offering.
Future Consumer Enterprise also runs 5000 Annapurna Bhandars in partnership with the government of Rajasthan. Future Group is the parent of listed retail companies Future Retail, Future Lifestyle Fashions and Future Consumer Enterprise.
Questions & Answers
Q.What is Future Group's primary motivation for buying Sangam Direct?
What is Future Group's primary motivation for buying Sangam Direct?
This acquisition is part of Future Group's strategy to expand its presence in the food and groceries sector. It is their third such acquisition in northern India in the past three years, alongside earlier buys in the south.
Q.How many stores does Sangam Direct operate, and where are they located?
How many stores does Sangam Direct operate, and where are they located?
Sangam Direct has approximately 35 stores. These stores are currently spread across two major Indian cities: Bengaluru in the south and Delhi in the northern part of the country.
Q.Which companies were the previous owners of the Sangam Direct chain?
Which companies were the previous owners of the Sangam Direct chain?
Sangam Direct was most recently owned by Wadhawan Retail Ventures. Before that, Hindustan Unilever started the chain in 2001 as an online grocery platform, selling it to the Wadhawan group in 2007.
Q.What is the anticipated financial impact of the Sangam Direct and Heritage Foods acquisitions on Future Group’s revenue?
What is the anticipated financial impact of the Sangam Direct and Heritage Foods acquisitions on Future Group’s revenue?
The acquisition of Sangam Direct, along with the potential purchase of Heritage Foods' retail business, is expected to add Rs800 crore, equivalent to US$120 million, to Future Group's annual revenue.
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