Future Group’s unit Future Lifestyle Fashions will buy a 29.9 per cent stake in one of the oldest online fashion and lifestyle brand retail --- Koovs for about Rs 140 crore. Both companies being public entities, the deal is subject to regulatory and internal approvals. Subject to conditions, Koovs will issue Future Lifestyle 57,876,600 new ordinary shares at 10 pence per share, representing 24.8 per cent of the enlarged issued share capital, raising £5,787,660 of cash, according to a statement of Koovs’ website. Before Biyani, other famous Koovs investors include British businessman-turned-politician Lord Waheed Alli, a former chairman of Asos.com and Alli also founded Koovs in 2012. “Lord Alli has committed to invest £1.5 million in the equity raise and FLFL (Future Lifestyle) has conditionally agreed to make additional investments to take its ownership up to 29.9 per cent within six months of completion of the equity raise,” said a Koovs statement.
Cashing in on online boom
Future Group’s Kishore Biyani, over the past 10 months, had been emphasising on digital channels and announcing new tech-driven strategy – Retail 3.0 - a fusion of retail and technology. Koovs is an online store that sells its own labels and inventories of a few popular brands. A major chunk of its revenue comes from the in-house brand. Future Group sees a sizeable potential to sell Koovs’ product line through the network of its brick & mortar stores. Unlike acquisition of Fabfurnish (Rocket Internet’s home furnishing unit) that later proved to be another failure, investment in Koovs fits well for the Future Group.
Koovs curates fashion from various international brands targeted at 18-34 years old Indian youth and about 40 per cent of the company’s sales come from its private labels. The company at present rakes in revenue of about Rs 200 crore. This is Biyani’s latest go at e-commerce two years after a failed acquisition of online furniture seller FabFurnish.com from Germany-based Rocket Internet. Future Group last year folded FabFurnish after it was not able to leverage FabFurnish for its planned offline-and-online retail plans with Home Town furniture and home products chain.
Meanwhile, Future Group is getting ready for its new digital format to be called Tathastu which will be launched on November 21, 2018. It will facilitate everything at the consumer’s doorstep. Biyani says e-commerce companies hardly contribute less than 0.2 per cent of total retail sales and will never be able to turn profitable. After establishing themselves in metros, these companies are planning to foray into the rural areas. However, Future Group does not intend to follow suit as the consumer spend in these areas is very low.
The Future Group is also planning to partner with technology companies to foster Tathastu. In future, it will also leverage technology to bring in personalisation for the customer. Meanwhile, for strengthening its offline part, Flipkart has been negotiating an 8-10 per cent stake in Future Lifestyle Fashions Ltd (FLF), the listed fashion arm of the Future Group. Flipkart’s arch-rival Amazon had picked up a 5 per cent stake in Shoppers Stop in September this year.
Future Lifestyle has a portfolio of more than two-dozen global and local brands including Lee Copper, Indigo Nation, Scullers, Clarks, John Miller, Jealoys, CoverStory, aLL among others and also owns Brand Factory chain and Central, a large department store chain.