The Closet Works is purchased by The Container Store for a sum of $21.5 million dollars.
The Container Store, a popular home organization retailer, has made a strategic move to expand its product offerings and strengthen its position in the market by acquiring Closet Works, a specialist in custom closets and storage solutions, for $21.5 million on December 30.
This acquisition is part of The Container Store's ambitious plan to eventually double its sales. According to the company's CEO and President, Satish Malhotra, the acquisition of Closet Works is a significant step towards achieving this goal.
The acquisition aims to expand The Container Store's custom closet offering with more customization options for closets, garages, home offices, pantries, laundry rooms, and murphy beds. This move is expected to help the retailer gain a larger share of the estimated six-billion-dollar custom closet market, particularly in the higher-margin spaces above $2,000.
Tom Happ, the previous co-owner and president of Closet Works, has joined The Container Store as Closet Works president to help with the integration. Happ's expertise in the custom closets industry is expected to be invaluable in seamlessly integrating Closet Works' products and services into The Container Store's offerings.
The acquisition has already shown positive results, with The Container Store's custom closets business seeing a 22.1% increase in its net sales in the most recent quarter. This growth is a testament to the demand for high-quality, specialized closet systems among consumers.
The Container Store has also benefited from the shift in consumer spending during the onset of the pandemic, as people adjusted to working and schooling remotely. This has led to an increased interest in home organization, fostered by popular shows like "Tidying Up with Marie Kondo" and "Get Organized with The Home Edit."
The Container Store notched its first Q1 profit in over a decade last year, with net income hitting $17.7 million. In its most recent quarter, the retailer reported the best second quarter consolidated net sales in its history, with net sales from its retail business up 11.3% year over year to $259.4 million.
The acquisition of Closet Works is expected to create cross-selling opportunities and improve market differentiation, which can positively influence overall sales and market share growth. However, for specific details on the expected sales impact, official corporate statements or financial disclosures would be required.
With the addition of Closet Works, The Container Store is poised to offer an even wider range of home organization solutions to its customers, attracting new segments looking for customized organizational solutions and strengthening its position against competitors. The future looks bright for this home organization powerhouse.
- The acquisition of Closet Works by The Container Store, a home organization retailer, is anticipated to create cross-selling opportunities and enhance market differentiation, potentially leading to increased sales and market share.
- The custom closets business of The Container Store saw a 22.1% increase in its net sales in the most recent quarter, following the acquisition of Closet Works, demonstrating the demand for high-quality, specialized closet systems among consumers.
- Tom Happ, the previous co-owner and president of Closet Works, has joined The Container Store to help with the integration of Closet Works' products and services, leveraging his expertise in the custom closets industry.
- The acquisition of Closet Works positions The Container Store to offer a broader range of home organization solutions, including customization options for closets, garages, home offices, pantries, laundry rooms, and murphy beds, helping the retailer tap into the six-billion-dollar custom closet market.
