Future Group’s online retail space, FabFurnish to merge with furniture retail unit HomeTown, reported ET. The merger is to create a separate listed entity with a target revenue of Rs 1,000 crore by the end of the next financial year.
HomeTown will be the biggest vendor on FabFurnish, which Future Group bought 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," said Kishore Biyani, CEO at Future Group.
"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. Competition is heating up in India's furniture industry, three-fourths of which is controlled by standalone stores and carpenters,” he said.
HomeTown has 42 stores at present and plans to add eight by end of the year. The company said the average ticket size at HomeTown is about Rs 44,000, which is not easily matched at online portals. Apart from increasing sales in the furniture business, Biyani is targeting earnings before interest, taxes, depreciation and amortisation of Rs 40 crore-Rs 50 crore in the current financial year from the combined entity.
"Our strategy is not to increase the cost and to expand the business. We are not going to be top-line driven. That's how we are going to make FabFurnish profitable in another three months," he said.
