tech2 News StaffApr 07, 2016 15:30:25 IST
Retail giant Future Group has confirmed acquisition of online furniture store FabFurnish. This is the first online acquisition that the Kishore Biyani-led group has made.
Future Group already has its finger in the home and furnishing business with the HomeTown brand of stores and seems to be taking a step towards an offline-online model. “We will leverage FabFurnish’s online platform and delivery model to grow our presence in markets where we do not have offline stores or have minimal reach,” said Kishore Biyani, chief executive officer of Future Group,” reports Mint.
It adds that Future Group may pay between Rs 15 crore to Rs 20 crore in cash to buy the Rocket Internet-backed startup. Neither Future Group nor FabFurnish have commented on the financial details though. The report also adds that the FabFurnish brand will be retained and the online platform will be used to take Home Town online. FabFurnish's management team and its 100 odd employees are most likely to join the Future Group.
The report also said that FabFurnish, which earlier sold private labels besides promoting merchants on its platform, became a full-fledged marketplace late last year. During the same time, the company also fired almost one-fourth of its workforce. Despite an early start in the online furnishing business, FabFurnish succumbed to competition from Pepperfry and Urban Ladder that recently saw funding rounds led by Goldman Sachs and Sequoia Capital respectively.
German group Rocket Internet had started this year on shaky ground when reports were doing rounds about its possibility of exiting India businesses. It had already begun to look for potential deals for FabFurnish then. Rumour has it that fashion retail brand Jabong and online food ordering business Foodpanda may be next on the sale list. Apparently, the group is disappointed with its portfolio in India and has decided not to focus on the Indian market.
For Future Group, the move also means it is upping the ante before Swedish furniture retailing giant IKEA. IKEA's first store in Hyderabad will be a massive 4 lakh square feet in size and will include all features of a global IKEA store, including restaurant and play and development area. The company plans to target Delhi, Mumbai and Bengaluru next. "We are creating the largest home furnishings company in the country. IKEA is coming in, and it will take them at least two to three years to become an Rs 1,000 crore company, and we are already there," Biyani said in this report.
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