MUMBAI: The Tata Group is reportedly exploring joint venture plans for home furniture and lifestyle products retailing with Steinhoff International, one of the top five integrated lifestyle furniture suppliers in Europe and Australasia, and the largest in Africa, sources said.
The JV is likely to be called Tata Home and is expected to be set up through an SPV of Tata Sons or Tata Africa Holdings, sources said. It is learnt that discussions have reached the business planning stage. Officials of both groups are discussing plans to set up 50,000-60,000 sq ft formats across leading metros and tier I markets, sources said.
R Balasubramanian, chief executive and director of Tata Africa Holdings, a subsidiary of Tata International, is believed to be coordinating the entire plan. Tata Africa has entered into joint ventures and partnerships with several African companies and generated total revenues of $210 million in 2006.
When contacted, a Tata Group spokesperson said: “The information is baseless.” A listed entity, Stienhoff distributes household goods (mainly bedding, case goods and lounge furniture) through its retail networks in the UK (Harveys, Bensons for Beds, Sleepmaster, Bed Shed), Hungary (Quattro Mobili), Australia, New Zealand (Freedom, Leather Republic and Snooze) and South Africa (Pennypinchers and Timber City).
Infiniti Retail currently owns and runs Croma — the countrywide chain of multi-brand consumer electronics and durables in technical and sourcing collaboration with Australian retail major Woolworths. Founded in 1964 by Bruno Steinhoff in Westerstede, Germany, the Steinhoff Group converted in 1989 from a marketing/distribution company to a manufacturer and distributor of household goods.
The Group owns over 70 factories spanning the UK, the Netherlands, Germany, Poland, Hungary, Ukraine, South Africa, India, Australia and New Zealand.
The Tata Group has been largely focused on the lifestyle and non-grocery retailing space where business margins are far higher and competition comparatively thinner.
According to rough estimates, home furniture accounts for nearly Rs 14,000 crore of the Indian furniture market, and the organised players control only 10-12% of this. Consumers are getting more brand conscious and the market is growing at over 20%, industry players say.
KSA Technopak estimates say durables purchases peak in the 20-34 years age group and the growing number of double-income couples setting up households are driving growth in the country.