Verdane strengthens online furniture specialist PremiumXL by acquiring Lomado
Verdane provides its portfolio company PremiumXL with fresh capital to acquire Lomado
Verdane, the European specialist growth equity investor, today announced that its portfolio company, PremiumXL, an online retailer of home & living products, has acquired Lomado, a fast-growing online retailer with a focus on bathroom furniture. The acquisition enhances PremiumXL’s range of high-quality furniture. The combined company will keep the Lomado brand and will continue to sell the brand’s furniture via its own online shop as well as various online marketplaces. The merger of the two e-commerce companies will allow far more efficient use of the joint warehouses and logistics infrastructure in the future. Within the scope of the transaction, PremiumXL will acquire all shares in Lomado. The company founder Bernd Schnittger will retain a significant minority stake in the combined company and becomes the company’s third largest shareholder. Verdane is supporting the transaction by investing in the combined company from its Edda II fund.
Based in Bünde (Germany), Lomado has more than doubled its sales every year since its founding in 2018. The specialist for bathroom, living room and bedroom furniture sells a significant portion of its products in Germany, Austria and the Netherlands, mainly via its own online shop as well as via online marketplaces. Lomado has been profitable since its foundation and generated sales in the upper double-digit millions in the 2021 financial year. Together with Lomado, PremiumXL is planning its entry into additional furniture categories. PremiumXL will also focus more strongly on the direct distribution of products via its own online shop in the future. In addition, the B2B business, which includes logistics services such as warehouse management and the shipping of items, will be further expanded. The continued consolidation of the online furniture market under the umbrella of the PremiumXL Group is another key aspect of the corporate strategy.
Verdane entered into a partnership with PremiumXL in the summer of 2021 and has been supporting the company with its extensive e-commerce expertise ever since. PremiumXL currently employs around 100 people and has achieved double-digit sales growth in the last five years. In the past 2021 financial year, the company benefited from the ongoing structural shift of bricks-and-mortar to online retail and increased its sales by around 30 percent. For the 2022 financial year, PremiumXL expects the positive development to continue and, together with Lomado, is aiming for further strong growth. Verdane’s goal is to expand PremiumXL into a larger Home & Living group that sells its wide range of products to a large and diverse B2C and B2B customer group via various online channels such as its own online shop as well as via national and international online marketplaces.
Growth opportunities in the fragmented online furniture market
Verdane and PremiumXL see great growth potential in the highly fragmented online furniture market. The European investment company, which specialises in growth capital, expects the entire online market for home & living to grow by 10 to 15 percent, while growth in the in-store furniture market is likely to be only 2 to 5 percent. The COVID-19 pandemic has accelerated the shift away from physical stores to digital shopping. Verdane anticipates an impending consolidation of the fragmented market and would like to play an active role in this process under the umbrella of PremiumXL.
Maroje Guertl, Principal at Verdane’s Berlin office, said: “The pandemic has also triggered a growing shift towards online retailing in the European furniture market. Increasing competition as well as higher freight and marketing costs will accelerate the consolidation of the market that is already underway. Currently, there are many small and medium-sized companies that would benefit from a merger with other furniture specialists, and this in turn could, for example, increase their bargaining power vis-à-vis suppliers. A merger into larger business units also offers the opportunity for cross-selling, expansion of the product range and better visibility on the marketplaces. These are precisely the advantages that we see in the context of the acquisition of Lomado. We look forward to pursuing this path together with the teams from PremiumXL and Lomado.”
Hermann Tiben, founder and CEO of PremiumXL, said: “We are very pleased to be able to work with the Lomado team in the future. Thanks to the partnership, we are strengthening our market presence in the highly fragmented online furniture market and also expanding our product range for our customers. In addition, the merger offers us the opportunity to use our logistics infrastructure more effectively.”
Bernd Schnittger, founder and CEO of Lomado, added: “In recent years, we have built Lomado into a strong online brand with its own presence and good relationships with the leading online marketplaces. In order to maintain our pace of growth, we have found a strong strategic partner in PremiumXL. Our products with a focus on bathroom, living room and bedroom furniture are an excellent complement to PremiumXL’s product range. We are also looking forward to working with Verdane, which has extensive experience in building brands and e-commerce, making them the best possible growth partner for us.”
Verdane is one of the most active growth equity investors in Northwestern Europe and has extensive e-commerce experience with investments in over 40 companies since 2003 including bildeler.no, Boozt, CAIA Cosmetics, FiksuRuoka, Desenio, InnoNature, Momox, asgoodasnew and RoyalDesign.