Kishore Biyani, CEO of the Future Group is buying online furniture store FabFurnish.com—its first acquisition of an Internet store, as it looks to take on the threat posed by Swedish furniture retailing giant IKEA, which is expected to make its entry next year, and in the process, also marking the first exit of Rocket Internet in India.
Future Group, which owns a home and furnishing business under the brand HomeTown, confirmed the deal. Financial details of the deal remain undisclosed however two people familiar with the matter told Livemint that Future Group may pay anywhere between 15-20 crores in cash for the deal.
“Today I operate in only 20 cities (through Home Town). Now I can operate all over India,” Biyani told ET. He, however, declined to disclose the exact amount paid by Future Group to acquire the online furniture retail venture.
FabFurnish, operated by Gurgaon-based Bluerock eServices Pvt Ltd, posted revenue of Rs 78.93 crore for 2014-15 compared with Rs 47.22 crore the year before. It competes with online furniture sellers such as UrbanLadder.com and Pepperfry.com, besides horizontal e-commerce players such as Flipkart, Snapdeal and Amazon.
Future Group is one of India’s biggest brick-and-mortar retailers. It operates the hypermarket chain Big Bazaar, supermarket chain Food Bazaar and gadget and consumer durables store eZone, among others.
Last year, after the founders Mehul Agrawal and Vikram Chopra quit the company to start their own ventures, FabFurnish shifted to solely marketplace model. It also fired almost 25% of its workforce and vacated its warehouse towards cost cutting and improve the financial health.
However, the company eventually failed to sustain its business amidst the stiff competition from the other heavily funded ventures such as PepperTap backed by Goldman Sachs and UrbanLadder backed by Sequoia Capital.