While many of the retailers are cribbing about the high cost of retail outlets, the retail empire with revenues of around Rs.10,000 crore, Future Group seems to believe in the conventional wisdom of joining if not beating the rivals. The Group is eyeing a piece of India’s booming real estate sector—putting finishing touches to new homes. The Kishore Biyani promoted Future Group has tied up with developers in various cities including Lavasa Township near Pune, Nirmal Lifestyle Ltd in Mumbai, Aparna Constructions and Estates Pvt. Ltd in Hyderabad and Omaxe Ltd in Delhi to undertake projects such as furnishing apartments to providing fitted kitchens.
“You name the big builders and we are working with them, both on helping them finish certain homes before possession, or working with the home owners” on furnishing, said Mark Ladham, who used to work for home solutions retailer B&Q before Future Group hired him six months ago as president of its home division, comprising Home Town, Furniture Bazaar and Home Bazaar.
Ladham said B&Q used to handle around 40,000 homes annually, helping builders and home owners to design and finish their apartments. He expects Future Group will be handling more than that in India five years from now. “You look at the demand and you look at the home ownership projections over the next five years in India. We are really on the low end of that curve,” Ladham said. “The demand is going to triple if not quadruple in the next five years. (Home owners) need people to come and finish off their homes.”
Typically, homes in India are bare shells when handed over to buyers, who then need to complete the rest of the furnishing on their own or through local contractors, where reliability can be an issue. This is the niche that Future Group wants to enter. Biyani, founder and the chief executive of Future Group, said the home division, could become the second biggest revenue earner for the company in the next five years, propelled by the latest venture—Home Town Design and Build Services. That would put it behind the flagship Big Bazaar supermarket division that has annual sales of around $1 billion (Rs.4, 532 crore).
“This could be the most promising business for us going forward,” Biyani said. Home Town Design has received orders from various developers for about Rs.700 crore and he expects the business to clock Rs.1, 000 crore in revenue by the June fiscal year end. In the next five years, Biyani expects around Rs.5, 000-6,000 crore in revenue from the venture. While Biyani declined to disclose the investment being planned in the venture, Ladham said it would be “significant.”
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