RIL — Forays Into 750 Bn Furniture Retailing Market
- Reliance Retail Ventures acquires 96% holding in Urban Ladder for Rs 182 cr.
- Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries Limited (RIL) has acquired equity shares of Urban Ladder Home Decor Solutions Private Ltd (UrbanLadder) for a cash consideration of Rs 182.12 crore.
- The investment represents 96 percent holding in the equity share capital of UrbanLadder. RRVL has a further option of acquiring the balance stake, taking its shareholding to 100 percent of the equity share capital of UrbanLadder.
- RRVL will make a further investment of up to Rs 75 crore to be completed by December 2023 to acquire 100 %.
- UrbanLadder was incorporated in India on February 17, 2012. UrbanLadder is in the business of operating a digital platform for home furniture and decor products.
- It also has a chain of retail stores in several cities across India. UrbanLadder’s audited turnover was Rs 434 crore, Rs 151.22 crore and Rs 50.61 crore, and Net Profit/(Loss) of Rs 49.41 crore, Rs 118.66 crore and Rs 457.97 crore in FY 2019, FY 2018 and FY 2017 respectively.
- The aforesaid investment will further enable RIL’s digital and new commerce initiatives and widen the bouquet of consumer products provided by the group while enhancing user engagement and experience across its retail offerings.
- No governmental or regulatory approvals were required for the said investment. The investment does not fall within related party transactions and none of RIL’s promoter/promoter group/group companies have any interest in the transaction.
Market Overview
- The global furniture and home furnishings stores market is expected to decline from $609.78 billion in 2019 to $402.2 billion in 2020 at a compound annual growth rate (CAGR) of -1.6%. The decline is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 5% from 2021 and reach $750 billion in 2023.
- North America was the largest region in the global furniture and home furnishings stores market, accounting for 34% of the market in 2019. Asia Pacific was the second largest region accounting for 33% of the global furniture and home furnishings stores market. Africa was the smallest region in the global furniture and home furnishings stores market.
- In 2014, many e-commerce retailers started offline stores. Birchbox, an e-commerce store opened its first physical store in Soho, New York and companies like Bonobos and Warby Parker doubled the number of their brick and mortar stores in 2014. E-commerce retailers setting up offline stores are good news for brick and mortar concept because it validates the need for physical stores.
- The major players in the global furniture and home furnishings stores market are Ashley Furniture Industries, Heritage Home Group, Herman Miller, Inter IKEA Systems, Steelcase.
The Global Furniture And Home Furnishings Stores Market is segmented:
1) By Type: Furniture Stores, Home Furnishings Stores
2) By Ownership: Retail Chain, Independent Retailer
3) By Type of Store: Exclusive Retailers/Showroom, Inclusive Retailers/Dealer Store