Aditya Birla Retail may take a couple of years to turn profitable

Recently, Kumar Mangalam Birla-led Aditya Birla Group announced merger of its two retail arms — the Aditya Birla Nuvo-owned fashion retailing business with Pantaloons Fashion & Retail. The merger has led to the launch of Rs 12,000 crores (around two billion dollars) branded apparel entity called Aditya Birla Fashion & Retail (ABFRL). While the industry experts believed that Birla would bring its loss-making supermarket format More under the new entity, the company has refuted having any such plans. And now the industry experts hint that Aditya Birla Retail may take a couple of years to become profitable at EBITDA level.

Impact of ecommerce and rising rentals of real estate has forced More Megastores, retail business of Aditya Birla Retail (ABRL), to open stores only in high margin driving places like Bangalore, Hyderabad and Delhi. The company has decided to open only three stores this year. For now, the company operates three stores in Hyderabad, three stores in Delhi and five stores in Karnataka apart from one each in Thane, Mumbai, Vadodara, Gujarat and Indore in Madhya Pradesh. ABRL has around 500 supermarkets across the country.