Barely a month after acquiring the home furnishings e-marketplace FabFurnish, Future Group’s Group CEO, Kishore Biyani is considering its merger with HomeTown.
Future Group has been operating the HomeTown retail chain for the last 10 years and creating a standalone home furnishings company is a move towards unlocking value, the company said in a statement.
Biyani plans to demerge Hometown from Future Retail, merge it with FabFurnish, and list the new entity separately.
“We are looking at creating value as we merge and create an independent identity for our home furnishing business,” Biyani said at a press conference on Wednesday to announce the re-launch of Fabfurnish.com on May 5, 2016, along with a campaign and discounts in the marketplace.
HomeTown will be the biggest vendor on FabFurnish, which Future Group acquired last month for about Rs 20 crore from German incubator Rocket Internet.
“While it still not a board decision, we could still look at listing it as a separate entity because otherwise you can’t create value,” Biyani said.
“Our aim is to create some value in this business. With FabFurnish, we will be creating the largest home furnishing and decor business in the country,” he added.
FabFurnish is a high margin and profitable business, which currently operates at 40-41 per cent margins. Under Future Group, the home furnishing brand aims to penetrate around 100 more cities. The Future Group is relaunching Fab-Furnish on Thursday.
According to HomeTown CEO, Mahesh Shah, “HomeTown is expected to become a Rs.1,000 crore business by the end of the current financial year which makes it the largest home furnishing company in the country.”
There are 42 HomeTown retail stores and the plan is to add eight more in this fiscal year.
Meanwhile, Swedish furniture and home furnishings maker Ikea’s first India store is expected to launch in 2017, which could further disrupt the sector.
Biyani, however, feels that by the time Ikea launches, HomeTown will be a sizeable business, with Rs.1,500 crore revenue and, hence, would not be impacted.
Future Group is the parent of listed companies such as Future Retail Ltd, Future Lifestyle Fashions Ltd and Future Consumer Enterprise Ltd.
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FabFurnish is a high margin and profitable business, which currently operates at 40-41 pc margins and under Future Group, the home furnishing brand aims to penetrate around 100 more cities
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