Untested business model, immature market weighed heavily on the venture, a dealer said JSW Group has shut down JSW Forma, its furniture business venture, in less than one year of its grand launch.During the initial days, JSW Living, the holding company of the furniture business, had announced plans to invest up to Rs 250 crore over five years to become a leading steel furniture business company.

It had set itself a sales target of ₹50 crore in the first year, when the business was launched last April.JSW Forma had adopted an asset light model by outsourcing production to two entities in Nagpur and Bhiwandi, on the outskirts of Mumbai. The company’s products started at ₹19,000 and were available at 62 outlets.Flawed business modelA flawed business model and an immature market for steel furniture has forced the company to shut down the venture, said a dealer associated with the company.

It took more than five years for an established global furniture player like IKEA to open its first store in India. It got regulatory permission to enter India in 2013, but opened its first shop in Hyderabad in 2018 and completed its first anniversary late last year.In contrast, Tata Steel is planning to offer several new products such as doors, windows, modular housing and furniture. Currently, the company sells 8,000 steel doors a month and targets to sell 30,000 doors.JSW Steel refused comment on the development.

The steel furniture business was spearheaded by Tarini Jindal Handa — daughter of Group promoter Sajjan Jindal.Forma planned to buy steel from JSW Steel, to make products and supply it to dealers.Unlike other large conglomerates, JSW Group has never shied away from recognising a wrong business decision and taking corrective measures before big damage is done, said sources tracking the Group’s investments in recent times.Earlier, the Group had dropped plans to enter the electric vehicle business, even while pumping in more money into the struggling JSW Energy business.

On the reasons for quitting the electric vehicle business, Sajjan Jindal, Chairman, JSW Group, in a recent interview with BusinessLine, said the Group had planned to buy the General Motors plant in Pune and convert it into an electric vehicle manufacturing unit, but it did not work out.

Moreover, he added that the electric vehicle business in India was in a nascent stage and a lot of missing pieces need to evolve, which would take substantial time.Asked whether the Group would have done anything differently if it had edged out ArcelorMittal to buy the Ilva steel plant in Italy, Jindal said (laughing), probably, there was some third force that diverted the deal and saved the Group from all the suffering.

As the sole bidder in 2018, JSW Steel had won the Ilva plant, but the bidding process was called off by the Government in the hope of getting more bidders.ArcelorMittal, which acquired the plant in the second round of bidding, is now struggling to hand over the plant back to the government, besides seeking concessions to turn around the business.