TCC Concept set to acquire Pepperfry, a well-known realty service brand
Pepperfry, the online furniture retailer co-founded by Ashish Shah and Ambareesh Murty in 2012, is set to change hands. BSE-listed real estate service provider TCC Concept has executed a term sheet to acquire up to 100% shares of Pepperfry.
The financial terms of the acquisition have not been disclosed yet, but the move is intended to enhance customer experience, create operational synergies, and unlock new growth opportunities for TCC Concept.
Pepperfry has been looking for a buyer since last year due to slowing sales and unattainable profitability. The company's revenue dropped 30.6% year-on-year in FY24 to Rs 188.98 crore. However, Pepperfry managed to narrow losses by 37% in FY24 compared to the previous year, by nearly halving its advertising costs and sharply reducing its employee-related expenses.
TCC Concept, apart from its real estate services, also provides co-location and hosting solutions for data centers and has a data analytics platform for real estate stakeholders. The acquisition of Pepperfry is expected to boost TCC Concept's e-commerce presence.
Pepperfry competes with players such as Wooden Street, Urban Ladder, legacy, and local furniture retailers. The company has expanded to more than 200 physical stores in FY24.
Ashish Shah, who was elevated to CEO of Pepperfry following the demise of Ambareesh Murty, expressed his excitement about the acquisition, saying, "We are thrilled to join forces with TCC Concept. This partnership will enable us to accelerate our growth trajectory and deliver an exceptional customer experience."
TCC Concept's market cap, as of Friday's close, is Rs 1,846 crore. Shares of TCC Concept hit an upper circuit of 5% at Rs 543.35 following the announcement of the Pepperfry acquisition.
It is worth noting that TCC Concept reportedly considered potential buyers such as IKEA and Reliance Industries for Pepperfry, with the sale discussions hinted at around early 2023. However, the deal with TCC Concept was ultimately sealed.
Pepperfry shelved its IPO plans following the sudden demise of its co-founder and former CEO, Ambareesh Murty, in August 2023. The acquisition by TCC Concept marks a new chapter for Pepperfry as it navigates the competitive e-commerce landscape.
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