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Future Group is considering hiving off its furniture business under HomeTown as a listed entity after merging it with its newly acquired online retailer – FabFurnish. Currently, HomeTown as a format exists under its listed flagship company – Future Retail.
“It has been 10 years since we started HomeTown and now we are seeking shareholder value in this business after merging it with FabFurnish. There is a thought of de-merging the furniture business after the merger of HomeTown and FabFurnish since we are targeting a ₹1,000-crore turnover from the home business this fiscal,” said Future Group Chairman, Kishore Biyani.
FabFurnish as a business is also hoping to turn profitable now. The company’s co-founder Ashish Garg said: “We are re-launching FabFurnish and have a target to turn profitable in three months. There will be no subsidising of the products going forward.”
FabFurnish will continue to operate as a marketplace, with HomeTown as one of the largest vendors.
“Unlike the rest of the e-commerce players, we are not going to be spending money to acquire customers and be topline driven. FabFurnish will be making money on commissions and act as a commission agent. Today, our furniture business has Ebita levels of about ₹60 crore. Furniture as a business is growing at 25 per cent but segments like kitchens has slowed down,’’ added Biyani.
Besides, Future Group is also making furniture buying cheaper for its customers. It is now tying up with Bajaj Finance to bring out financing schemes based on credit to make the products more affordable. “We are working on a monthly rate in which we will partner with Bajaj Finance to give furniture on credit,’’ added Biyani.
Currently, Hometown has 40 stores with 10 more in the pipeline with its largest store measuring about 35,000 sq ft. The format will continue to be sold through other e-commerce sites like Pepper Fry, Flipkart and Paytm. “FabFurnish will basically give us the capabilities in technology and we will use our sourcing capabilities to emerge as one of the largest furniture players. We will continue to sell through other e-commerce sites,’’ said Mahesh Shah, CEO, HomeTown.
Besides, Future Group is already on its way with its omni-channel strategy as it is going online across its formats like eZone and Big Bazaar and is developing apps for the same.
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