Steinhoff International Holdings is in exclusive talks with France’s PPR to buy its Conforama furniture business for a cash sum of €1.2 billion.
PPR is selling Marne-La-Vallée, France-based Conforama to focus on its Gucci Group luxury goods and Puma sporting goods divisions. The Paris-based company is also planning to sell the Fnac music chain and the mail-order retailer Redcats.
For Johannesburg-based Steinhoff, Africa’s biggest furniture maker, the acquisition will add 241 stores to the company’s existing 951 retail outlets in Europe. The company has previously said it is interested in investing in Europe.
Conforama is France’s second-largest furniture retailer behind Ikea. The retailer also has outlets in Switzerland, Luxembourg, Spain, Portugal, Italy and Croatia. In the first six months of 2010, Conforama’s sales rose 6.2 per cent, followed by a third quarter sales rise of 9.8 per cent.
PPR’s CEO Francois-Henri Pinault said in October that the company was likely to acquire more brands to add to its luxury and lifestyle divisions after selling one or two of its retail businesses. In addition to Gucci, PPR is home to fashion houses Yves Saint Laurent and Stella McCartney, as well as leather goods maker Bottega Veneta.
Commenting on the talks, Steinhoff’s CEO Markus Jooste said: “Should this transaction be concluded, it will allow us to reinforce our position as one of Europe’s leading integrated furniture and household goods companies by giving us access to key markets such as France, one of Europe’s largest household goods markets, and other territories where Conforama operates.”
Thierry Guibert, CEO of Conforama, stated: “I would be particularly proud and eager to see Conforama join the Steinhoff group. With Conforama being part of an industry player like Steinhoff, we would be able to pursue the strategic goals of the company, accelerate its development and establish itself as a leader in products for the home.”
The deal is expected to be concluded within the next few weeks.
Steinhoff operates more than 50 factories in countries including Poland, the Netherlands, Australia and South Africa, and has more than 1,100 retail outlets. It employs about 41,000 people.
