Future Consumer Enterprise Ltd (FCEL), the food and FMCG arm of Kishore Biyani-led Future Group, has decided to exit from non-core beauty and wellness chain business which is housed under its wholly-owned subsidiary Star & Sitara Wellness Ltd, as per a stock market disclosure.
It did not say whether FCEL is shutting down or selling its stake in Star & Sitara. An email query to the firm seeking further details on the development did not elicit any response.
FCEL, formerly known as Future Ventures, had acquired unisex salon chain Star & Sitara from group flagship Pantaloon Retail India Ltd for a nominal sum of Rs 1 lakh in September 2012 and had pumped in close to Rs 18 crore in the business.
At that time it had around 30 centres and thereafter consolidated the business by discontinuing some of the non-profitable stores. Star & Sitara had a presence in nine cities with 19 centres across the country as of March 31, 2014.
During the year ended March 31, 2014, Star and Sitara has reported sales of Rs 6.83 crore, EBITDA loss of Rs 9.84 crore and net loss of Rs 10.97 crore.
Meanwhile, the company has also obtained its board’s approval to acquire 51 per cent stake in Bangalore-based MNS Foods Pvt Ltd, which sells wafer cream biscuits, chocolate enrobed wafer biscuits and confectioneries. The deal involves subscription to new shares.
This would be in line with the group’s strategy in boosting its food products business across the value chain.
FCEL has an exposure to agri-sourcing, food infrastructure, manufacturing, food and FMCG brands besides retail and distribution.
It houses small format chains KB’s Fairprice and Big Apple besides Aadhaar, a rural wholesale distribution unit. Last year it also acquired another convenience stores chain Nilgiri’s. Run by The Nilgiri Dairy Farm Pvt Ltd in south India, Nilgiri’s was previously owned by PE firm Actis.
The Nilgiri Dairy Farm is directly, and through its subsidiaries, engaged in the business of licensing franchisee rights to third parties for operating convenience stores under the Nilgiri’s brand, manufactures food, grocery, chocolates, dairy and other products and is involved in trading in general merchandise and imported products. It also owns a portfolio of brands in these products.
FCEL also owns 73.89 per cent stake in Integrated Food Park Private Ltd (IFPPL), a public private partnership (PPP) project for a mega food park in Karnataka with Future Group’s flagship Future Retail, Capital Foods (a previous portfolio firm of Future Consumer) and Bangalore-based Salarpuria Group’s real estate firm Sattva as its promoters.
Future Group, once India’s top retailer with a growing presence in financial services space, has been consolidating its business after piling up huge debt over the years.
Most recently it announced a big move to forge a joint venture with Mittals and merge Bharti Retail with its flagship firm Future Retail.
Shares of FCEL were trading at Rs 11.08 each, down 1.25 per cent on BSE in a strong Mumbai market on Monday at 12.26 PM.