Closet Works, a furniture company specializing in custom closets, has been purchased by The Container Store for a sum of $21.5 million.
The Container Store, a leading retailer of storage and organisation solutions, has announced the acquisition of home storage and closet organization company, Closet Works, for $21.5 million. The deal, which took place on December 30, marks a significant step in The Container Store's expansion strategy, driven by its CEO and President, Satish Malhotra.
The acquisition will see Closet Works' previous co-owner and president, Tom Happ, join The Container Store as Closet Works president. He will work alongside Steve Rettig, the president of Closet Works who will play a role in the integration process.
The move is part of The Container Store's strategy to eventually double its sales. The company plans to capitalise on the increased demand for customization options, offering more customization for closets, garages, home offices, pantries, laundry rooms, and even Murphy beds.
The custom closets business has seen a surge in sales, with a 22.1% increase in sales during the same period. This growth is reflected in The Container Store's financial performance, with the company reporting its first Q1 profit in over a decade last year, and a net income of $17.7 million. In its most recent quarter, The Container Store reported the best second quarter consolidated net sales in its history.
Net sales from The Container Store's retail business were up 11.3% year over year to $259.4 million. This growth can be attributed in part to The Container Store's strategic partnerships with popular Netflix shows like "Tidying Up with Marie Kondo" and "Get Organized with The Home Edit".
The acquisition of Closet Works will further expand The Container Store's custom closet offerings. The company has already shown its commitment to custom closets, having opened a store dedicated to custom closets in Los Angeles in 2019. Last month, The Container Store expanded its assortment with The Home Edit by iDesign, launching products made from paulownia wood.
With the integration of Closet Works, The Container Store is poised to continue its growth trajectory, providing customers with even more options for custom storage and organisation solutions.
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