The Container Store has acquired Chicago-based home storage solutions and closet organization company Closet Works for $21.5 million.
The storage retailer announced that the strategic acquisition will expand its manufacturing capabilities in wood-based spaces and enhance its premium wood-based product offering. Container Store already manufactures component-based systems through its wholly-owned Elfa subsidiary.
The acquisition provides Container Store with quality equipment and facilities located centrally in the United States and will allow it to maintain control of products from manufacturing to installation, giving the company increased quality control and expanded profit margins, according to the company. With the acquisition, Container Store noted, the company expects to expand the range of premium wood-based products it provides across diverse categories including, beyond closets, garages, home offices, pantries, laundry rooms and Murphy beds as well as extend design customization options. An enhanced garage offering is a specific element the company has identified as an opportunity for growth, Container Store asserted.
To assist with the business integration, Closet Works president and previous co-owner Tom Happ has joined The Container Store as president of Closet Works.
“As part of our effort to double our sales over time, I am thrilled to announce our strategic acquisition of Closet Works,” said Container Store President and CEO Satish Malhotra. “This acquisition allows us to meet the growing consumer demand for premium wood-based spaces and expand our capabilities, in an effort to gain a larger share of the estimated six-billion-dollar custom closet market – particularly in spaces above $2,000 – with expanded profit margins. We look forward to working with the talented team at Closet Works to strengthen our leadership position in this category.”