Andreas Seifert attacks Ikea

The furniture giant XXXLutz, founded by the Seifert family – known for the oversized red chair as an advertising logo – already operates 370 furniture stores in 13 European countries and has annual sales of more than five billion euros. This makes the Ikea competitor significantly larger than Home24.

And even Ikea has only just overtaken XXXLutz in terms of sales, at least in Germany. Because last year, Seifert incorporated parts of the family business Tessner Group from Goslar, thereby expanding its branch network by more than a hundred stores under the Roller and Tejo brands.

Home24 sales have collapsed

With the takeover of Home24, Seifert now wants to secure its stationary business in e-commerce as well. At the end of last year, XXXLutz had already joined the online search engine moebel.de, which specializes in home furnishings. According to their own information, XXXLutz already has 24 online shops in different countries. The family business does not reveal how much sales it makes with it.

Almost a year ago, it was not foreseeable that Home24 would now become a bargain for XXXLutz. At that time, the online furniture retailer Home24 grabbed the decoration chain Butlers and was itself on an expansion course. But customer reluctance to buy as a result of the Ukraine war caused sales to plummet. In the first half of the year, they fell by 13 percent.

“We are very happy and feel vindicated that one of the largest furniture families in the world wants to buy us,” says Marc Appelhoff, who has been the sole boss of Home24 since 2020. He should continue to manage the business at Home24: “We were assured that we can work independently on our vision and receive support for it.” The takeover bid is a good thing for the approximately 2800 employees as well as the shareholders.

The company, which emerged from the then start-up forge Rocket Internet, had a turnover of around 615 million euros last year and ended up just above the breakeven point in operational terms. Home24 intends to be operationally profitable again this year. But Appelhoff also knows: “It’s a challenging environment.”

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This is also shown by current industry figures. According to figures from the online trade association BEVH, e-commerce sales in Germany fell by 10.8 percent in the third quarter. And the “furniture, lamps and decoration” segment is hit even harder by the buyers’ strike. Sales there even fell by 15.6 percent.

Home24 is to disappear from the stock market after the takeover

If the takeover goes through, Home24 will be taken off the stock exchange. According to Appelhoff, the time on the stock market has been characterized by “many ups and downs”. After Home24 started in 2018 with a market value of around 600 million euros, it was recently around 100 million euros. In addition to Westwing, Home24 has made the online sale of furniture socially acceptable in Germany and Europe.

The XXXLutz subsidiary RAS has already secured around 50 percent of the shares in Home24. In addition, there will be another ten percent from a planned capital increase excluding subscription rights for the other owners of the online furniture retailer. According to Appelhoff, no decision has yet been made on how to proceed with the listed Brazilian subsidiary Mobly. Home24 continues to hold the majority there.

After the review by the financial supervisory authority Bafin, the offer document for the Home24 takeover is expected to be published at the beginning of November. The acceptance period for shareholders would then run until mid-December. There is no minimum acceptance threshold.

“With its strong brand and leading position in the online furniture market, Home24 is an ideal addition,” emphasized Thomas Saliger, Head of Marketing at XXXLutz. The company announced that the core brands Home24 and Butlers will be retained. The growth strategy of the online retailer should also be supported financially in the long term. The company’s headquarters in Berlin and “essential locations” of the Home24 Group were retained, according to a statement.

Cartel Office brakes the expansion of XXXLutz

In its attack on the furniture market, XXXLutz is mainly relying on inorganic growth, i.e. acquisitions of smaller competitors. In 2018, for example, Seifert also integrated the Poco stores from the Steinhoff Group into his company. XXXLutz also owns the purchasing association Giga International, through which other companies also buy and which now has a volume of almost ten billion euros.

The company is thus increasing its purchasing power more and more and can obtain better purchase prices from the manufacturers. This has already alerted the Federal Cartel Office. This is what happened two years ago when XXXLutz requested a birthday discount for its 75th anniversary. Seifert gave in and significantly reduced the discount, as the authority announced at the time.

The Cartel Office had only approved the purchase of parts of the Tessner Group subject to certain conditions. It prohibited the takeover of 22 of the 155 registered Tessner locations and made the sale of a XXXLutz location a condition. “In the respective regional markets, the merger would lead to a significant impairment of competition,” said Andreas Mundt, President of the Federal Cartel Office.

Ikea has so far been calm in the face of the attack by XXXLutz in Germany. The growth of the competitor only comes about through acquisitions, said Ikea Germany boss Dennis Balslev recently to the magazine “Wirtschaftswoche”. He would be much more nervous if XXXLutz grew under his own steam.

But with the Home24 takeover, XXXLutz’s purchasing power continues to increase – and with it the opportunity to attract new customers with attractive prices. And with that, entrepreneur Seifert can even become a threat to the furniture giant Ikea in the long run.

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