Subject to shareholder approval, China's Qumei Home Furnishing Group – supported by Huatai Zijin Investment – is to buy Norwegian recliner manufacturer Ekornes, owner of the Stressless brand.
Shareholders representing 25.65% of Ekornes' total share capital – including members of the Ekornes family – have already accepted the voluntary offer, subject to conditions.
"This agreement opens new growth opportunities for Ekornes and our renowned brands such as Stressless and IMG in China and in existing markets," says Ekornes CEO Olav Holst-Dyrnes. "Qumei is a leading furniture group with more than 850 stores in China. We will benefit from Qumei's insight into Chinese consumers' design and product preferences and gain accelerated access to the Chinese market."
"Qumei's sophisticated digital marketing approach, complementary product range and sourcing capabilities should make us a better and stronger partner for all our retailers. Better customer understanding, improved concepts and enriched distribution channels should create accelerated sales of our Stressless, IMG and Svane brands. All in all, we believe the agreement with Qumei will constitute an opportunity for more sales in China and elsewhere, and in turn result in increased production at our current production plants."
Ekornes will remain headquartered in Sykkylven, Norway, and its existing manufacturing sites in Norway, the US, Thailand and Vietnam will remain in place.
Ruihai Zhao, general manager of Qumei, which first approached the company last year, comments: "We have been following Ekornes for many years, and we are impressed by Ekornes' strong brand and advanced production. We look forward to introducing Ekornes' brands to the rapidly-growing Chinese furniture market. The acquisition of the company is in line with our global strategy and the first crucial step in Qumei's globalisation efforts.
"We put great emphasis on protecting the value of the Ekornes brands and we intend for Ekornes to remain an independent business, which will continue to be run out of Sykkylven. We do not believe in a model where the manufacturing process of international brands is moved to China. Qumei will maintain and invest in Ekornes' current production facilities in Norway and internationally and we will work closely with Ekornes to further develop its business, through sharing of Qumei's advanced internet marketing technology. We are committed to continue and increase investment in research and development through the existing centre in Sykkylven and elsewhere, to drive further product development related to the Ekornes brands."
Qumei is a publicly listed company on the Shanghai Stock Exchange, while Huatuai is a private equity fund controlled by Huatai Securities Co, a public company which provides financial services in and outside China. Qumei says it plans to expand its retail network in China with an additional 500 stores and 1500-2000 concessions over the next five years.
The offer values Ekornes' total share capital at approximately NOK5.1b – approximately £471m.
