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Nilgiris Acquisition by Future Group

One of the biggest things to happen in a long time in the Indian retail scene is Nilgiris acquisition by Future Group.

Nilgiris is one of the few retailers in south India that has been very successful for a long time and also has been going through ownership changes for some time now. We do hope that Future group would provide good support for Nilgiris.

Having had a chance to work with Nilgiris just once and understanding the dynamics of the Indian retail scene, there are several opportunities and challenges for all the parties involved - Future Group, Nilgiris and the Franchisees.


Opportunities for Future group

  • Working with a franchise network
    • Nilgiris is one of the biggest Franchisee network and Future group can learn a lot from them.
  • Better product mix management for various segments
    • Nilgiri's strong point is that it has got the right product mix for every customer segment and the right kind of store for the location
  • More complicated vendor management
    • As a result of being a franchisee network, it also has a complicated vendor management that Future group can learn from
  • Nilgiris is one of the few retail chains that makes a good net margin.
    • This should boost Future group's top line and Bottom line

Opportunities for Nilgiris

  • More investment on IT. 
    • Their POS has not been developed in almost 5 years. ACTIS put a hold on any IT investment
    • It helps all the parties for more Investment in POS
  • Much needed backend infrastructure investment

Opportunities for Franchisees

  • Franchisees have not had their contract negotiated with Nilgiris for some time now
    • They have agreed on the contract terms because of the Nilgiris brand value
    • Future Group could play it a little less aggressive and this could benefit the Franchisees

Challenges for Future group

  • Handling so many franchisees
  • Integrating with the proper systems
  • Giving independence to franchises on the product mix - 
    • This is the key to a having a successful franchise network

Challenges to Franchisees

  • Adjusting to a new kind of retailing
    • Future group is into mass retailing and the vendor system might be different that how it was under the previous management

Having said that, It would be interesting to see how this unfolds and how the indian retail scene reacts to the development.
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