Butlers shops are actually quite busy. The decoration and furnishing chain has 40 million customers every year. But that easily belies the crisis that not only butlers, but the entire junk shop industry has been going through for years.
There are quite a few shops that basically sell similar things for relatively little money: Flying Tiger, Depot, Nanu Nana, Tedi, Action, to name just a few. Here you can find candles, baskets, boxes, tablecloths, fairy lights and of course Christmas balls. Things that you often don’t even plan to buy, but simply take with you.
There are currently gaps on the shelves in some stores. The delivery bottlenecks are particularly noticeable here. Most of the goods come from Asia – and some of them do not arrive here due to production downtimes or transport difficulties. Lockdowns and 2-G rules in inner cities in this country are exacerbating the crisis again.
Butlers had already gone bankrupt in 2017. Rents exceeded staff costs and sales left a lot to be desired. Since then, the company founded by Wilhelm Josten in 1999 has picked itself up again – among other things with financial support from the state of North Rhine-Westphalia. In the past years marked by the corona pandemic, it has even been profitable according to its own statements. Nevertheless, the next big change is coming up now. Josten sold.
Impulse buying items and large pieces of furniture supposedly complement each other well
The online furniture retailer Home24 is taking over Butlers along with its 100 branches in Germany, Austria and Switzerland. There are also 32 franchise stores in other European countries.
Home24 boss Marc Appelhoff said in a conference call on Thursday that both dealers complement each other “ideally” and are “completely complementary”. On the one hand, Butlers with his “emotional approach” and his own brands; Every year Butlers and its designers develop 3,000 of their own articles and offer occasions for “impulse purchases” with their “seasonally relevant goods”. And on the other hand, Home24 with its online expertise, its e-commerce platform, the range of furniture and its logistics.
According to the information, Butlers already makes a quarter of the expected 95 million euros in sales in online retail. Together they come one step closer to a turnover of 700 million euros and thus to Home24’s goal of becoming a “billionaire company”.
The question, however, is whether Home24 is doing itself a favor with the Butlers branch network and, as hoped, is adding a new sales channel – or tying a block to the leg? Appelhoff said that his team had already considered expanding the number of showrooms that Home24 operates. The Butlers branches were now used for this purpose.
Home24’s current ten showrooms would be retained as long as the leases exist. Home24 furniture would be offered by Butlers in the future. Both brand names persist. But Home24 does not want to become an offline retailer, said Appelhoff. The share of the stationary trade in Europe will amount to about ten percent of the total turnover of the Home24 group after the takeover.
Furniture in, furniture out, furniture in
It is noticeable, however: After the bankruptcy, Butlers had cleared all furniture from the range and concentrated on decorative and table accessories as well as gift items – obviously with success. Previously, it had been interpreted as a mistake that Butlers had mostly put smaller furniture in the shops like in a showroom. At the time, critics complained that the space in the shop could hardly be used more unprofitable. Furniture is seldom bought, but even if it is small, it takes up space for things that can be made money – thanks to impulse buying.
Be that as it may, the takeover was initially well received on the stock market. Home24 was recently relegated from the S-Dax, the index for small companies. The price has been under pressure for weeks, also because some speculators have bet that the price will fall. On Thursday, however, the price jumped at times by more than six percent. Analysts expect that, thanks to the takeover, sales and earnings of Home24 will improve noticeably in the coming year.
However, Home24 is still making losses at the moment. In the first nine months of this year the minus was a good 25 million euros, twice as high as a year before. On the other hand, sales continued to rise.
How high the purchase price will be has not yet been determined due to variable parts. The specific amount should result in the middle of next year. The price is expected to be between 70 and 100 million euros. Home24 directly buys 75 percent of the shares in Butlers Holding. The remaining quarter will be brought in by Butlers founder Josten in exchange for new Home24 shares. In return, Josten will receive 3.9 percent of the shares in Home24 and will thus currently be the largest single shareholder in the group. He should work for Home24 in the future, in which position is open. The supervisory board decides on this, said Appelhoff.