Home24, an online start-up furniture retailer launched by Rocket Internet has acquired its German rival Fashion for Home. Financial terms of the deal has not been disclosed but sources suggest it could be all-stock deal.
Founded in 2012, the Berlon-based Home24 is an online furniture retailer that operates in seven European markets and Brazil. The online store sells more than 150,000 products from more than 800 manufacturers. It sells various products ranging from unique array of furniture items, lamps to many private labels like Smood, Furnlab, Jack&Alice and Marteens.
On the other hand, founded in 2009, Fashion for Home sells designer furniture online and has sells through stores in German cities like Berlin and Munich. Last year, the company made $20.1 million through its sales.
Through the acquisition, Home24 could have the benefit of having online stores as well as traditional stores. Only a week ago, even Amazon opened its first traditional bookstore in Seattle. The two companies would be functioning as separate entity where Fashion for Home products would be sold through Home24 and some selected Home24 products would be sold on Fashion for Home and its physical stores. The companies plan to combine its marketing and sourcing further to the closure of the acquisition deal.
Domenico Cipolla, CEO of Home24 said, “With the acquisition of Fashion For Home, we are further complementing our offering and strengthening our leadership position. Ever since the start of both companies we have been working on the same vision: to revolutionize the way people buy furniture and to become the leader in global online furniture. We are happy to work on this common vision under one strong roof from not on and see synergies across several areas.”
If the traditional stores concept work well for Home24 it plans to open up more stores in the future though their main focus would be on e-commerce. Cipolla said, “We are going to go where our customer are.”When asked about its plans for an initial public offerings he said, “Our priority is to turn this company into a really long-term oriented, sustainable, profitable company.. an IPO for us at this point in time is not an option.”
Furniture sales online holds only a small portion of the online market but it is said the market is growing rapidly and has a good scope for growth and expansion.