Kishore Biyani-led Future Retail Ltd said on Thursday it will merge its home furnishing brand HomeTown with its online furniture store FabFurnish.com to sharpen focus on its core food and apparel retail businesses.
HomeTown and FabFurnish will be merged into a separate company called Praxis Home Retail Pvt. Ltd, which will be publicly listed, Future Retail said in a stock-exchange filing.
“The decision will spin off specialty retail business and ensure greater visibility on the performance of the home retail business and e-commerce home retail unit,” the company said.
HomeTown offers an array of products such as furniture, mattresses, modular kitchens as well as other household items. It posted revenue of Rs 477 crore for the year through March 2016. That’s a small part of Future Retail’s total revenue of Rs 6,716 crore for 2015-16.
The Biyani-led group had acquired FabFurnish.com in an all-cash deal last year from Germany’s Rocket Internet.
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. Its latest financials could not be ascertained.
Future Retail gets bulk of its revenue from the Big Bazaar chain of hypermarkets and EasyDay supermarkets as well as fashion stores under the fbb brand and food retail chain Foodhall.
Earlier this year, Biyani had hinted that the group was likely to sell HomeTown, shut sportswear arm Planet Sports and merge electronics chain Ezone with Big Bazaar. The move was aimed at expanding the apparel and food segments. The retail major hopes these segments will be its main growth drivers and help it quadruple revenue by 2021.
As part of a larger strategy, the Future Group earlier this year reshuffled the portfolios of some top executives and hired a new marketing head to boost revenue growth at its consumer, supply chain and retail businesses.
Like this report? Sign up for our daily newsletter to get our top reports.