ScS has acquired the brand, domain names, website, intellectual property and stock of Snugsofa.com (Snug) from the administrator of Snug Shack for consideration of £875,000.
Snug, a digital-first sofa and sofabed business specialising in modular and re-configurable sofas, was founded by Robert and Peter Bridgman in 2018 as one of Europe’s first sofa-in-a-box concepts (see related), and has grown to become one of the largest retailers in this segment of the furniture market.
Although predominantly online, Snug also operates from one store in Leeds.
ScS CEO Steve Carson comments: “Snug is an exciting and young business with great potential. It has a strong and recognisable brand, a differentiated product and targets a market that complements our proposition. In that regard, it presents us with an exciting opportunity to further increase market share. We therefore, view it as a great strategic and cultural fit which reinforces our commitment to helping our customers create the home they love. We look forward to welcoming our new colleagues into the ScS family.”
ScS expects there to be an opportunity to add Snug concessions to its stores, providing the brand with significantly improved national visibility and penetration. Snug’s brand and differentiated digital-first offering is set to complement ScS' existing proposition, further diversifying its customer base and increasing market share. Snug’s innovative approach to social engagement and digital marketing will be an asset to the wider ScS business while Snug will benefit from the group’s expertise, supplier relationships and scale, says ScS.
Snug has 53 members of staff who have been a significant part of its success, and that team will join the group as part of the acquisition.
For the 12 months to 31st December 2022, Snug expects revenues of c.£20m.
Snug will report in line with the ScS' financial year, apply the group’s accounting policies, and is expected to be earnings accretive in FY24.
A team from Evelyn Partners completed the sale of the business and assets, and says that in the 2021 financial year the company recorded revenues in excess of £30m, up from £7m a year before. As a digital-first company, the brand has subsequently grown a social media community of over 300,000 people and garnered multiple industry awards.
Despite big ambitions for 2022, Snug was faced with difficult trading conditions against a backdrop of a challenging economic climate, says Evelyn Partners – in particular, a +700% increase in shipping costs, unfavourable exchange rates, and further effects of the cost of living crisis.
"It has been a rollercoaster few years balancing exponential growth with supply chain challenges and growing a team remotely through Covid," states Snug's management team. "Snug set out to disrupt the industry with fast and convenient delivery of modular sofas, and this new partnership with ScS supports us in our ambitions to be a leader in the industry. Snug’s loyal customer base has been the foundation of our success since the beginning, and we’re now looking forward to continuing this journey with their support and the support of such a well-respected and established partner.”
