Tags:
Journalism of Courage
Kishore Biyani-led Future Group, which acquired online furnishings retailer FabFurnish last year, has began the process of merging the firm with its flagship entity Home Town, and is recalibrating the workforce to eliminate duplication in roles, two sources told The Indian Express. With the merger going through, one of the sources said, the FabFurnish brand would cease to exist.
The source informed that some of the staffers might be absorbed by other entities within the group, but those in certain categories where duplication in roles might occur, such as logistics and supply chain, an estimated 20-30 people might be asked to leave.
“The original plan was to have one single brand, and so FabFurnish is being merged into Home Town, which would have presence both online and offline,” the source said.
According to another company official, Future Group acquired FabFurnish from Rocket Internet to strengthen its presence in the furnishings space, which was limited to Home Town being present in 20 cities only at that time. The reinforcement of the business segment was being done at the time to prepare the Kishore Biyani-led Future Group against the entry of Swedish furniture giant Ikea, the official said. As of December 31, 2016, Future Retail had 37 Home Town stores in 21 cities, against 42 stores as of December 31, 2015.
In the process of the merger between the two entities, the Future Group is also recalibrating the workforce, and while some of the staffers might be absorbed by other entities within the group, those in certain categories where duplication of roles might occur, such as logistics and supply chain, might be asked to leave. One of the sources said that this number was estimated to be around 20-30. An e-mail query sent to Future Group did not elicit any response. An SMS sent to the company’s spokesperson also went unanswered.
The move comes at a time when other online furniture sellers such as Pepperfry and Urban Ladder are also reeling under pressure of high cash burn and slowing sales. Both these companies are reportedly planning to expand their offline presence through brick-and-mortar stores. Pepperfry, which is backed by Goldman Sachs, currently has 14 stores in Delhi, Mumbai, Hyderabad, Bengaluru, Chennai, and Pune, and is planning to more than triple the count during the year. Urban Ladder, too, recently raised funds to the tune of $15 million, with an aim to build an offline presence.
Last month, a successful initial public offering by low-profile brick-and-mortar retailer Avenue Supermarts, which witnessed the market offering it a 100 per cent premium on the first day of listing over the valuation it sought through the exercise, made analysts point to the fact that it was a message for investors who were investing only in online retailers, and did not pay much heed to brick-and-mortar platform. Avenue Supermarts operates 112 D-Mart stores in 41 cities.
