The two former partners own about 100 such properties; expansion of Best Price, EasyDay stores only after transactions linked to the split are over.
Together, the Bharti group and American retail chain Walmart have an estimated 100 pieces of unused real estate across the country, adding up to at least one million sq ft. But expansion of both Best Price Modern Wholesale stores, as well as EasyDay stores, might have to wait till transactions linked to the split between the partners are over.
While some of these were ready-to-roll-out stores, others were leased property where construction was either underway or yet to begin, sources said. These deals were tied up either early this year or earlier, when the two partners hadn't conceived a split.
Last year, expansion of cash-and-carry stores under Best Price Modern Wholesale stopped at 20; under the Easyday brand, it stopped at 215. On an average, a cash-and-carry store is about 25,000-30,000 sq ft, while a retail store such as EasyDay is about 5,000 sq ft. EasyDay Hypermarkets, however, measure about 20,000 sq ft each.
This year, not a single store under any of these formats was opened. It is now expected expansion work for these would start by mid-2014.
Of the 100 properties, 14-15 were meant for wholesale or cash-and-carry, which sold only to shops and offices, sources said. Of these, half a dozen were ready-to-roll-out, they added. EasyDay stores, including hypermarkets, are expected to account for the remaining real estate.
On the space already tied up for EasyDay stores and the chain's expansion plans, a Bharti spokesperson said, "We have a long-term view of this business and are fully committed to it. We will continue to invest in its growth."
A Walmart India spokesperson said, "We are pleased with our cash-and-carry business and anticipate substantially growing it, even as we continue to monitor the environment for foreign direct investment in multi-brand retail."
The transactions could take up to three months, said a source in the know. Apart from regulatory issues on merger and demerger, the companies have to work on the exchange of hands in the case of compulsory convertible debentures (CCD). In 2010, Walmart had invested $100 million as CCD in Cedar Services, the holding company of Bharti Retail. The US retailer was to convert the CCD into 49 per cent equity. The investment has been under the scanner of the Enforcement Directorate for alleged violation of the Foreign Exchange Management Act. Now, Bharti has agreed to purchase that CCD. Also, shared assets and businesses between Walmart and Bharti had to be sorted, sources said. They listed real estate, procurement, licensing and even human resource sharing between the partners during the last six years.
Earlier this week, Walmart and Bharti, 50-50 joint venture partners in the cash-and-carry business decided to separate. Walmart will own the cash-and-carry business completely, while EasyDay would be run by Bharti. So far, Walmart had a franchisee agreement with EasyDay and provided it back-end support.
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