2. July 2012–
Rocket Internet has sold its stake in Fashion For Home to Acton Capital Partners and Holtzbrinck Ventures, as part of a new funding round for the online furniture retailer in the "low double-digit millions".
Fashion for Home, founded in 2009 by Marc Appelhoff and Christoph Cordes (left and right respectively) and based in Berlin, sells made-to-order designer furniture in Germany, the UK, the US, Austria and the Netherlands.
In February this year, Rocket Internet held 26.4 per cent of the company with Holtzbrinck at 14 per cent, Haligk AG at 32.3 per cent and the two co-founders at 12.4 per cent each. Following the latest funding round and Rocket's exit, Munich-based investor Acton Capital will hold 21 per cent.
Fashion for Home currently generates sales in the mid two-digit millions, employs 130 and has a monthly growth rate in the two-digit range.
Keeping up with the Samwers
In a statement today, Appelhoff said Acton's investment and experience will go towards establishing retail shops and mobile commerce solutions alongside the online shop. The first step in that strategy: a 400m² shop in the heart of Berlin due to open in the second half of August.
Diversifying into real-life retail will help Fashion For Home keep its niche as activity in the industry heats up. Oliver Samwer singled out online furniture sales in his infamous "blitzkreig" email as one of only a few spaces with the potential to grow billion dollar businesses. Rocket's exit from Fashion For Home follows new funding for its rapidly-expanding online furniture empire Home24 and a decision to wind down Fab-clone Bamarang in favour of a renewed focus on portfolio mate Westwing.
Fab's rapid growth following its acquisition of Germany's Casacanda in February will also be keeping the pressure on.
Appelhoff gave us his take on where Fashion For Home fits in:
We see every one of the 800 online furniture online shops as a competitor, but are confident we are positioned in an attractive niche with our 'best value for design' proposition. Home24 and all other online shops selling furniture online obviously compete in terms of online marketing, but not in terms of assortment and style where we aim to make a difference. Fab and Westwing are indirect competitors in our view as they focus on a subscription type model with their designer items shopping club – they offer all types of lifestyle design items at good value but not primarily in the furniture space."
The next digital battlegrounds – furniture, DIY, home decor...
New investor Acton is confident the space still has plenty of potential for growth. "The share of online sales in furniture retail is currently still low. The trend towards purchasing furniture online is, however, visibly growing," Acton investment partner Sebastian Wossagk said.
The number crunchers at McKinsey would seem to agree – check out the following slide from their presentation at LeWeb London (refers to the US market). We predict we'll see plenty more activity on this particular digital battleground this year.