The Future Group’s fashion brands will now be available on Amazon’s India e-commerce platform after the two announced a tie-up. The partnership will eventually encompass the Future Group’s entire product portfolio. Future Group stocks Future Retail and Future Lifestyle Retail were up 5 per cent at the day’s high, though some gains were ceded later.
Better margins
Future Lifestyle Fashions houses the group’s fashion brands such as Lee Cooper, John Miller, Indigo Nation, Scullers, Jealous 21, and so on and will be the first beneficiary from the partnership with Amazon. It adds considerable reach to the company’s already formidable retail space of around 4 million square feet.
Brands are sold through a mix of exclusive brand outlets and multi-brand department stores. With the company’s brands already commanding good recall, opening up the e-commerce platform in a big way through Amazon’s vast user base can provide a quick boost to sales growth.
The June 2014 quarter saw the company’s sales grow 11.7 per cent to Rs 683 crore. Selling on the online platform also involves lower costs – there’s no retail space to rent or maintain, for instance – allowing for quick scaling up of retail reach.
Profit margins for Future Lifestyle, currently at around 12 to 13 per cent, may thus improve too. Future Retail holds 19.8 per cent in Future Lifestyle Fashions after the former’s restructuring exercise to reduce debt.
Private label boost
Besides fashion, the Future Group can also slowly start selling its private food labels such as Tasty Treat, Fresh & Pure, Ekta and so on. Sales of these products can benefit Future Consumer Enterprises, which holds the Future Group’s food and FMCG brands.