Covid-19: Future Lifestyle seeks recast of payment to operational creditors

CARE Ratings has revised outlook on Future Lifestyle Fashions Ltd's long term loans from "positive" to "negative".

Future Lifestyle Fashions Ltd is seeking ad-hoc working capital limits from lenders to enhance liquidity as a temporary closure of outlets during the lockdown triggered by coronavirus (Covid-19) has hit cash flows. It is also negotiating with its operational creditors to restructure the payment terms.

CARE Ratings has revised outlook on Future Lifestyle Fashions Ltd’s long term loans from “positive” to “negative”. Rating is 'AA-'. The sharp fall in the share price of listed group entities has impacted the overall financial flexibility of the group and restricted the ability to raise further capital.

The reaffirmation of ratings of Future Lifestyle Fashions Ltd. (FLFL) derives strength from the vast experience of the promoters (Future Group) in the retail industry, established pan-India presence of various operationally profitable formats, healthy same-store sales growth and established portfolio of own and licensed brands.

The rating strengths are however tempered by moderate return on capital employed, high operating cycle coupled with susceptibility to economic cycles and increasing competition in the fashion retail industry.

While lock-down has impacted the company’s ability to generate cash flows, it, however, has adequate liquidity in the near term. The company has applied to lenders for a moratorium on payments as per the relief package (announced by RBI on March 27, 2020) and as per the lenders, the approval is under process. FLFL is also looking to enhance its working capital limits to augment its liquidity position.

As per the discussion with the management, the company has access to need-based support from its PE investors should the situation arise. In addition, the company is looking at postponing lease rentals and also taking other cost control initiatives to support liquidity. Further, the company is in discussion with the banks for sanction of ad-hoc working capital limits.

How ShareChat is helping local brands with language-focused advertising

As regional language media consumption soars during the lockdown, social media app ShareChat goes full throttle with brand integrations.

Local language social media platform ShareChat is engaging with hyperlocal brands, as well as helping established brands reach a wider audience through local language focused advertising campaigns, as its monetisation strategy takes hold. And at a time when brands are struggling to keep customers engaged in a meaningful manner, they find that focusing on local concerns and speaking in local tongues could help bridge the gaps.

“We have been witnessing a healthy growth since we opened our platform for brand integrations,” said Sunil Kamath, chief business officer, ShareChat. “Our regional strength in Tier 2, 3 and 4 cities, coupled with our unique UGC (user generated content) proposition for brands, is opening new marketing avenues for marketers who want to connect with regional first audiences.”

Much like what video-sharing app TikTok has done, ShareChat and several others are mining the large, mobile-first market in small towns. The 2020 State of the Mobile report by App Annie, a global analytics and market intelligence firm has found that India is right on top, when it comes to app downloads. Between 2016 and 2019, there was a 190 per cent increase in downloads by Indians, which is the highest in the world. Compared to this, globally, downloads went up 45 per cent and China at second place, grew at half the pace at 80 per cent.

Break it down further and for the majority of downloaders, the internet is an entertainment zone with the time spent on entertainment apps in India growing 80 per cent between 2017 and 2019. Also mobile-first emerging markets such as Indonesia, Brazil and India continue to spend the most time in mobile each day. And France, India and Canada saw strong growth with the average user spending 25 per cent more time in mobile each day in 2019 than in 2017.

Amazon India inks two long-term agreements with Future Retail, FCL

The development comes after Amazon had agreed to buy 49% stake in Future Coupons Ltd.

Company News : Amazon India on Monday said it has entered into long-term business agreements with Future Group for expanding the reach of the latter's retail stores and consumer brands through its online marketplace. The development comes after Amazon had agreed to buy 49 per cent stake in Future Coupons Ltd that in turn holds stake in Future Retail Ltd (FRL) last year.

"FRL and Amazon India signed two agreements focusing on key categories - grocery and general merchandise, and fashion and footwear," according to a statement released Monday.

Amazon India will also become the authorised online sales channel for FRL stores, and FRL will ensure participation of its relevant stores and programmes on the Amazon India marketplace, it added.

Besides, Future Consumer Ltd (FCL) has also inked a long-term agreement with Amazon Retail India Pvt Ltd (ARIPL) for distribution of Future Consumer's portfolio of brands online. Some of FCL brands include Tasty Treat, Voom, Dreamery, Karmiq, Mother Earth, Kara, CleanMate and others.

As part of the partnership, FRL will augment existing store-infrastructure at its retail outlets for facilitating seamless packaging and pickup of products ordered online. FRL and Amazon India have already launched this service across 22 stores. Both companies plan on rolling this out across the entire FRL store chain based on agreed timelines.

"FRL will leverage its existing infrastructure, strong product knowledge and extensive brand portfolio resulting in higher store productivity and improved margins," as per the statement.

Currently, FRL attracts over 350 million footfalls across its retail network, and Amazon India's marketplace will enable FRL to reach a wider customer base.

Also, FRL will list on the Amazon Prime Now programme, allowing customers to get food, grocery and general merchandise delivery within two hours in Delhi, Mumbai, Bengaluru, and Hyderabad.

FRL plans to soon list stores like Big Bazaar, and Foodhall in more cites on the Amazon India marketplace.