According to the Entrackr report, Flipkart Group is set to acquire the loss-making wholesale cash-and-carry business of its controlling firm and US retail behemoth Walmart in India.
Flipkart group which currently manages Flipkart and Myntra will, however, fulfill all regulatory requirements of its Walmart deal and serve as a subsidiary group to the company.
However, Flipkart, when contacted by the media, did not comment on the development.
Walmart’s currently loss-making business consists of 28 cash and carry stores across the country. Walmart India had previously laid off 56 employees across various levels including eight senior-level and 48 middle and lower-level employees as part of its strategic corporate restructuring according to previous reports.
The report comes at a time when Walmart India’s talks with the Tata Group has made no progress. Since early 2019, Tata Group has been in the negotiations for a joint venture with the US retail giant to debut in domestic cash and carry business.
Earlier, Walmart India had a JV with Bharti Enterprises in 2007, which fell through in 2013. Last week, the company also gave pink slips to over 50 employees as part of a restructuring exercise.
“We are also looking for ways to operate more efficiently, which requires us to review our corporate structure to ensure that we are organized in the right way,” Krish Iyer, president, and CEO, Walmart India had said in a statement.
Walmart began operations in India in 2007, starting with selling merchandise to local Kirana stores, hotels, and catering firms. Currently, it operates around 28 wholesale cash-carry stores and three fulfillment centres. It claims to have over 10 lakh consumers enrolled for its membership program.
Walmart has faced challenges in scaling the business in India, and it has been reflected in its financials. In the financial year 2019, the company witnessed a significant rise in losses.
The wholesale unit of the company posted revenue of Rs 4,065 crore while its losses amounted to Rs 171.68 crore compared to last year.
The company attributed increased losses in the period due to its investments for growth.
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