Closet Works gets purchased by The Container Store for a sum of $21.5 million dollars

The Container Store, a leading retailer in home organisation solutions, has announced its acquisition of Closet Works for $21.5 million on December 30. This move is part of the company's strategy to expand its custom closet offering and eventually double its sales.

In the last quarter, The Container Store reported its best-ever combined net income from the sales performance of custom closers. Although the specific company that achieved this feat remains unidentified, the success is a testament to the growing demand for customised storage solutions.

The acquisition of Closet Works is aimed at gaining a larger share of the estimated six-billion-dollar custom closet market, particularly in spaces above $2,000. With this acquisition, The Container Store plans to offer more customisation options for closets, garages, home offices, pantries, laundry rooms, and murphy beds.

The retail landscape has undergone significant changes over the past few years, with retailers re-examining topics such as shrink and pricing. The Container Store is no exception, and it has capitalised on these changes by partnering with popular Netflix shows like "Tidying Up with Marie Kondo" and "Get Organized with The Home Edit." Last month, The Container Store expanded its assortment with The Home Edit by iDesign, launching products made from paulownia wood.

The acquisition of Closet Works is also a strategic move to capitalise on the increased demand for customised storage solutions. The Container Store opened a store dedicated to custom closets in Los Angeles in 2019 and later opened another location in Dallas. The custom closets business saw a 22.1% increase in net sales year over year.

Tom Happ, previous co-owner and president of Closet Works, has joined The Container Store as Closet Works president to help with the integration. The company's net sales from the retail business increased by 11.3% year over year to $259.4 million. Last year, The Container Store notched its first Q1 profit in over a decade, with net income hitting $17.7 million. The retailer also reported its best-ever second quarter consolidated net sales.

In conclusion, The Container Store's acquisition of Closet Works is a strategic move to expand its custom closet offering and capitalise on the growing demand for customised storage solutions. With the integration of Closet Works and strategic partnerships, The Container Store is well-positioned to continue its growth and success in the home organisation market.