Another big brand filed for bankruptcy! Hangzhou sellers buy it at a bargain price

Since last year, many major American home furnishing brands have collapsed.

American home furnishing giant Bed Bath & Beyond filed for bankruptcy in April 2023 and immediately closed 896 physical stores across the United States.

Discount home furnishings retailer Tuesday Morning, which once had 700 stores across the United States, filed for bankruptcy in February 2023 and eventually closed all of its stores.

Z Gallerie , a long-established furniture retailer in the United States , filed for bankruptcy in October 2023. However, the company has seen a new turnaround this year.

Jesse acquires bankrupt U.S. furniture maker Z Gallerie

Recently, Jesse, one of the well-known companies in the cross-border e-commerce home furnishing category, officially acquired the e-commerce business of Z Gallerie, a long-established American furniture retailer, through its US subsidiary Karat Home.

It is understood that the acquisition transaction price is US$7.2 million, but Karat Home also needs to assume all debts related to Z Gallerie's e-commerce business.

In addition to all Internet assets and data related to Z Gallerie's e-commerce business, the acquired assets also include the remaining inventory of Z Gallerie's logistics distribution center as of the closing date of the transaction, as well as the products shipped to the logistics center.

It is understood that Z Gallerie was founded in 1979 and is one of the oldest furniture retailers in the United States. It is known for its unique modern style and once had more than 50 stores across the United States.

However, since its establishment, Z Gallerie has experienced several bankruptcy crises.

In April 2009, Z Gallerie filed for Chapter 11 bankruptcy.

By October of that year, Z Gallerie received a $22 million financing plan from Wells Fargo Commercial Credit, which kept the company afloat.

In October 2014, Brentwood Associates Private Equity V LP acquired a majority stake in Z Gallerie.

However, within a few years, Z Gallerie fell into bankruptcy crisis again.

In March 2019, Z Gallerie announced that it had filed a voluntary reorganization petition under Chapter 11 bankruptcy law.

In July of that year , DirectBuy announced that it had acquired Z Gallerie's assets for $20.3 million through a bankruptcy auction, including the retailer's headquarters in Gardena, California and at least 32 stores , many of which had already been closed.

In October 2023, Z Gallerie's parent company DirectBuy filed for bankruptcy, its third time filing for bankruptcy. The company plans to close all stores and look for new buyers.

Z Gallerie said in its bankruptcy filing that it was affected by the unfavorable economic situation, the company's store performance plummeted, and it encountered a serious supply chain crisis. As its cash flow was less than $500,000, Z Gallerie had to file for bankruptcy protection. Z Gallerie also said that its debts were between $50 million and $100 million.

In December 2023, Karat Home was identified as the preferred bidder for the Z Gallerie e-commerce assets.

At the beginning of this year, the United States Bankruptcy Court for the District of New Jersey formally approved Jesse Home's acquisition of Z Gallerie.

Scarlett Fan, general manager of J.C. Home Furnishing , also announced in an interview with the American media that Karat Home, a US subsidiary of J.C. Home Furnishing, has successfully completed the acquisition of Z Gallerie.

Regarding this acquisition, Scarlett Fan said, "Z Gallerie has high-quality brand assets and a loyal customer base, which is very consistent with Karat Home's development strategy. We believe that this acquisition will help Karat Home grow rapidly and become a leading home furnishing e-commerce platform in North America."

Karat Home is the main company of the acquisition of Z Gallerie by Jesse Home. It was founded in 2015. Its early business focused on textiles, and soon developed into other products including furniture. Currently, Karat Home's products are more inclined to soft home series, mainly sofas.

According to relevant reported data, Karat Home's total revenue in 2022 was US$75 million, which is said to be 20 times the revenue in 2018; the total assets were US$40 million, which is about 50 times that of 2018.

It can also be seen from Karat Home’s revenue that its contribution to Jessica Home’s performance is quite high.

Jessia's performance is growing rapidly and it is actively preparing for an IPO!

Public information shows that Jessia was founded in 2005 and is headquartered in Hangzhou, Zhejiang Province. It was originally a trading company focusing on the manufacturing of household textile products and household goods. It later successfully transformed into a cross-border Internet home furnishing company and retained its traditional trading business. It has now formed a full industrial chain layout from weaving, printing, embroidery to finished product processing and sales. The product line covers sofas, mattresses, dining tables and chairs, wardrobes, curtains and other household products to meet the needs of different consumers, and its annual sales are increasing rapidly. At the same time, Jessia has its own subsidiary in the United States and has built three large overseas warehouses to radiate the eastern, central and western regions of the United States.

Currently, Jesse owns several self-owned brands such as HULALA HOME and Tianran Home, and its products cover many well-known North American e-commerce platforms such as Wayfair, Amazon, Homedepot, Overstock, etc., and has now become the top 3 seller on the Wayfair platform. As we all know, Wayfair is a leading vertical home furnishing giant in Europe and the United States. It has successfully "killed" to the top of the category in the home furnishing track where competitors gather. Jesse's product advantages are evident. In fact, Jesse's sofas, office chairs and other furniture products also have good sales on the Amazon platform and are highly praised.

At the same time, Jessica targeted the home furnishing segment Sitting and established its absolute advantage. Data shows that seating accounts for about 45% of the US furniture market. Jessica itself has rich experience in making customized products for specific mid- to high-end groups, and has crushed its competitors in terms of quality, delivery time, user selection and life services. In less than two years, sales have successfully increased 10 times.

In the 2023 Black Friday Cyber ​​Monday promotion, Jessica achieved 124% of her Black Friday sprint goals and 107% of her Cyber ​​Monday sprint goals.

According to Jesse's official introduction, Jesse's sales are expected to exceed US$100 million in 2023.

While Jesse's performance is growing rapidly, it is also actively preparing for an IPO.

On November 15, 2023, Jessica signed a listing guidance agreement with CICC, officially launching the A-share IPO process.

In fact, various segments of the home furnishing market have already seen a number of hot-selling IPOs, such as Henglin Holdings, Lechuang and Zhiou Technology.

Last year, Jessica said that he would aspire to become an IPO company in the next three years and build a self-operated Internet industry to provide a humanized sales and shopping platform for merchants, customers, and brands.

While preparing for its IPO, Jessica's Home Furnishings acquired the e-commerce assets of US home furnishings retailer Z Gallerie. Industry insiders commented that Jessica's move was intended to strengthen its layout in the cross-border e-commerce field and was a good deal.

Because Z Gallerie has a rich product line that covers multiple categories such as furniture, accessories, and lamps, it can enhance the competitiveness of Karat Home's products in the future.

On the other hand, Z Gallerie has a certain market recognition in the United States and will help Karat Home enhance its brand influence in the future.

Do you think this acquisition by Jesse is a good one? Sellers are welcome to leave a message and participate in the discussion.

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