Mumbai's Iconic Rhythm House Store Finally Has A New Owner

The iconic music store Rhythm House has a new buyer in place. According to two people with direct knowledge of the matter, apparel retailer Bhaane Retail has been finalised as preferred bidder under the liquidation proceedings of Firestar Diamond International Pvt.

Bhaane Retail is owned by Anand Ahuja, and the company is a subsidiary of apparel manufacturer Shahi Exports. Ahuja, a self professed "sneaker enthusiast" also owns the multi-brand sneaker store VegNonVeg. He is also the husband of Bollywood film actor Sonam Kapoor.

The auction process underway is to take control of Firestar Diamond's 99.77% stake in Rhythm House Pvt. The company houses real estate assets currently. Alongside the Rhythm House store, Bhaane Retail will also take over 12,000 square feet worth office space in Kurla, owned by Firestar Diamond.

In 2017, Nirav Modi had bought the 3,500 square feet Rhythm House store in Mumbai's Kala Ghoda area from the Curmally brothers. At the time, the original owners had decided to shutter the store, owing to a steep fall in purchases of physical music CDs. The Kala Ghoda area is popular for being a boutique shopping location and hosts multiple fashion designer stores and premium restaurants.

According to the people quoted above, the new buyers are looking to create a retail outlet in the same space as the Rhythm House store.

After the Nirav Modi scandal erupted in 2018, all assets of Firestar Diamond were attached by the Enforcement Directorate, which were then allowed for auction. Multiple bidders had shown interest for the real estate assets. This included a public statement by Anand Mahindra, who proposed bidding for the iconic store through crowd sourcing the funds. The plan was to restore the store and convert it into a performance venue.

The liquidation process, however, did not allow specific assets to be purchased. Finally, after considering around five potential bidders, the liquidator has finalised Bhaane Retail as the preferred bidder, the people said.

Once the funds are settled, the ownership will be transferred to the winner.

According to the people quoted above, of the Rs 53 crore, over Rs 19 crore will be adjusted against a long term loan extended by Firestar Diamond to Rhythm House. The rest will be paid out to creditors of Firestar Diamond under the waterfall mechanism in the Insolvency & Bankruptcy Code.

The payout is, however, conditional, depending on the outcome of the investigations ED and other investigative agencies are conducting on Nirav Modi.