Home Depot Buys The Company Store
The Home Depot on Dec. 19 closed a deal to acquire e-tailer The Company Store from Weehawken, NJ-based Hanover Direct to expand its online home decor business. Terms of the deal were not disclosed.
The Company Store sells a variety of home decor, textiles, apparel, pet accessories and furniture via thecompanystore.com. The acquisition does not include The Company Store's five brick-and-mortar locations (three in Wisconsin and one each in Kittery, ME, and Mebane, NC).
In addition to its success as an online retailer, The Company Store claims strong relationships and industry-leading capabilities in the development and sourcing of high-quality textiles across bedding, bath and related categories.
"The acquisition of The Company Store provides product development and sourcing capabilities to help us expand our online decor business into broader categories across the entire home," said Craig Menear, Home Depot chief executive officer, in a media release announcing the acquisition.
Decor-oriented merchandise, such as flooring, lighting and window treatments, account for approximately $25 billion — or 25% — of Home Depot's sales, but decor alone makes up only $2.9 billion or 3% of sales, Credit Suisse research analyst Seth Sigman told USA Today. "Soft home and decor remains highly fragmented, creating an opportunity for Home Depot," Sigman said.
The acquisition will also help the company appeal to a new type of shopper. "Our quick analysis highlights The Company Store’s different customer base, including heavier skew to females, higher income and older, overall most comparable to Bed Bath & Beyond," Sigman said.
Home Depot's latest purchase follows the acquisition of rental and maintenance services company Compact Power Equipment for $265 million in cash several months prior.