MONROE, Mich. – La-Z-Boy Inc. has entered into a definitive agreement to acquire e-commerce retailer and upholstered furniture manufacturer Joybird.
Terms of the deal, which is expected to close early in La-Z-Boy’s fiscal 2019 second quarter, which begins in September.
Joybird, which will become a wholly owned subsidiary of La-Z-Boy, is the trade name of Stitch Inds. Headquartered in Commerce, Calif., with manufacturing operations in Tijuana, Mexico, Joybird is privately owned and was established in 2014 by Alex Del Toro, Andres Hinostroza, Joshua Stellin and Christopher Stormer.
The Joybird acquisition will be a core element of a multifaceted e-commerce strategy La-Z-Boy announced last year.
“Joybird is one of the premier players in the upholstered furniture e-commerce space, and we believe it will provide long-term value to La-Z-Boy and our shareholders,” La-Z-Boy Chairman, President and CEO Kurt Darrow said in an announcement of the deal.
Joybird manufactures custom, mid-century modern upholstered furniture and has experienced rapid growth, with annual revenue last year of approximately $55 million, according to the company. The co-founders will continue to lead Joybird, with responsibility for sales, customer service, marketing and brand development as well as the overall operation of the business. Operations will be supported by La-Z-Boy supply chain capabilities, which include procurement and manufacturing.
“The Joybird team has created an incredible brand and online shopping platform and this combination provides great synergies for both companies,” said Darrow. “For La-Z-Boy, it will allow us to better reach millennial and Gen X consumers, leverage our supply chain assets and provide us with a greater presence online.”
Darrow added that limited capital and production capacity have constrained Joybird’s growth.
“When we combine our world-class supply chain with Joybird’s current manufacturing capabilities, it will be able to accelerate expansion and better service its customers, by improving production speed and shortening delivery times, while lowering costs,” he said. “It is truly a complementary scenario, and we look forward to this exciting extension of our business.”
Christopher Stormer, one of the four co-founders of Joybird, said joining forces with La-Z-Boy will provide access to resources and additional capacity.
“We started Joybird with small investments from family and friends and enjoyed rapid growth over the past four years. However, to expand our business further, we need the additional capabilities that La-Z-Boy is providing, including its amazing supply chain with nationwide delivery capabilities,” Stormer said. “Joining La-Z-Boy provides us with the ability to become the leading online destination for unique, modern and contemporary furniture.”
The deal is subject to customary closing conditions. La-Z-Boy will supply financial information relating to the transaction when it reports its fiscal 2019 first-quarter results in August.
