Restructuring Pantaloon Retail: The 'Future Group' Initiative
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Case Details:
Case Code : BSTR227
Case Length : 18 Pages
Period : 2004-2006
Organization : Pantaloon Retail (India) Limited / Future Group
Pub Date : 2006
Teaching Note : Available
Countries : India
Industry : Retail
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"We never created a group identity in the past...We cannot
be known as Pantaloon. It was originally a trouser brand."1
- Kishore Biyani, CEO, Future Group, in May 2006.
"While Biyani has ambition combined with street smartness,
his business model could choke if there is inadequate funding. He has to be
careful about cash flows."2
– Arvind Singhal, Managing Director, KSA Technopak,3
in March 2006.
A New Identity
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On May 23, 2006, Pantaloon Retail (India) Limited (PRIL) announced that it had
signed an agreement to form a joint venture (JV) with the Italy-based Generali
Group4 (Generali) to tap the insurance sector in
India. The venture would be called 'Future Generali' and would be headquartered
in Mumbai, India. Generali would have a 26 percent stake in the venture, which
was expected to offer both life and non-life insurance products.
PRIL, which began as a trouser manufacturer in the mid-1980s, had grown over the
years to become one of India's largest retail chains.5
The foray into insurance was part of the group's diversification strategy. In
March 2006, the Pantaloon Group renamed itself as the 'Future Group'.
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The Future Group was divided into six verticals - Future Retail, Future Capital,
Future Brands, Future Space, Future Media, and Future Logistics. Under the new
structure, PRIL would be a part of Future Retail.
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The Future
Group planned to operate its insurance business through its financial
arm, Future Capital, which was involved in asset management. Future
Capital also had plans to get into credit and other consumer related
financial services such as banking, personal finance, and investment
services. PRIL planned to leverage on its retail strength to acquire
customers and cater to their insurance needs.
Analysts viewed the restructuring of the Pantaloon group and its
endeavor to establish a new identity as part of the ambitious plans of
Kishore Biyani (Biyani), CEO of the Future Group. Biyani was widely
regarded as one of the pioneers of organized retail in India. |
Restructuring Pantaloon Retail: The 'Future Group' Initiative
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