How much the deal cost is yet to be out but it is expected to be between Rs 15 and Rs 20 crore. The retail giant stated that the acquisition will be funded through internal accruals and ‘it (acquisition cost) is not a very big significant amount.’
While speaking about the intention behind acquiring FabFurnish.com, Biyani said, “We believe we can be the first company to get into the Rs 1,000 crore space this year in this business and this acquisition we want to create value out of this business and merge this business with FabFurnish and work on entering into more cities through our digital space. This is a high margin business and a profitable business and having achieved supply chain efficiency, sourcing capabilities, we are a significantly large player.”
To increase Home Town’s online presence via FabFurnish
Future Group’s furniture store Home Town has presence in several cities across India. However, it is still limited compared to online furniture stores. Therefore, the retailer plans to work on its omni-channel network and increase online presence through Fabfurnish.
“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 Biyani.
FabFurnish, which was performing well in the beginning, was struggling ever since Pepperfry and Urban Ladder entered the online furniture space. To complicate things even further, ecommerce biggies Flipkart, Shopclues and Amazon too entered this category.
Now with Future Group’s backing, the furniture etailer may regain its past glory.
Rocket Internet’s first exit
At least, one of them has come true with this Future Group acquisition. This marks Rocket Internet’s first exit in India. Will Jabong, Food Panda or Printvenue be next one to be sold?