German incubator Rocket Internet, which runs a string of consumer internet companies in India, is in talks with Kishore Biyani-led Future Group for the sale of its online furniture retailer FabFurnish, said two persons with knowledge of the development. Rocket Internet has also informally floated the idea of offloading its fashion online retailer Jabong to the Future Group as it looks to reduce losses but Biyani has not shown much interest in the business, said one of the persons. FabFurnish is the first property put up for sale by the Berlin-headquartered Rocket Internet, said the people cited above. Rocket Internet has reached a broad agreement with the Future Group to divest the business, one of the country’s largest publicly listed retail companies, they said. “The two are in definite talks to close the FabFurnish deal. Sale of Jabong is still at the proposal stage and no talks have started on it yet,” said one of the persons cited above. Jabong denied it was up for sale. The company has “seen strong operating performance in recent months and has strengthened its management team with a number of hires,” a company spokesperson said. “Jabong is not in discussions, at any stage, with anyone, regarding a sale of the company. The company’s largest see-through investor reiterated earlier this month its commitment to the business and the Indian market.” Jabong is committed to the Indian market but is open to options, Nils Chrestin had said in an October interview to ET. Chrestin is the CFO of Global Fashion Group, a Rocket Internet-owned international alliance that Jabong is part of. “Our management at any point of time always evaluates all options to maximise value for the shareholders, employees and our customers,” he said. FabFurnish didn’t respond to emailed queries. A Rocket Internet spokesperson said the company would not comment on “market speculations”. A mail sent to the Future Group did not elicit any response. Online retailers, which have sought to win customers by offering discounts, are looking to move away from the strategy to improve their finances. Xerion Retail, which owns Jabong crossed the .Rs 1,000 crore sales mark in the year ended March 2015, saw its net loss swelling to Rs 43.6 crore from.`16.6 crore a year earlier. The people cited above said Fab-Furnish could be sold for $5-10 million but this could not be independently verified. Jabong competes with the likes of Flipkart-owned Myntra and Snapdeal in India’s cutthroat consumer internet space.
Source: Economic TimesGerman incubator Rocket Internet likely to sell online furniture retailer FabFurnish to Future Group.
Industry: Retail 2016-02-24
