Heating and plumbing giant Wolseley has acquired a majority stake in online bathroom retailer BathEmpire.com for an undisclosed sum.
The acquisition aims to strengthen Wolseley’s position in the UK online market and provide a platform for further growth.
Wolseley chief executive Ian Meakins said:
“The UK B2C online bathroom market is growing rapidly and BathEmpire.com gives us an established brand with a scalable platform and the opportunity to build a significant presence over time.”
BathEmpire.com employs 96 staff at its Coventry headquarters and designs and sources its own products, supplying directly to consumers through its website.
In July 2013, the company secured an £8.5 million investment from Living Bridge, formerly known as ISIS Equity Partners. In the year to December 31, 2014, it turned over £26 million.
A market analyst told kbbreview:
“Online bathroom sales are a very, very profitable area when done well,”
“Manufacturers and some of the bigger retailers are aware that they must get into it. I know one big supplier to independent retailers is planning their own showroom and online site to sell products direct. It will create all sorts of arguments but the bottom line is that retailing bathrooms, in terms of consumer focus, is not being undertaken properly by independents – by definition to be fair – and therefore big boys with big cheques are trying to bypass them while justifying that it’s there to help promote the brand.
“Every single private equity firm you ever meet knows that every £3 million sales from bricks and mortar can be turned into a further £7m via the online channel with good marketing. As Tesco proved, nobody knows where to buy.
“If I had the capital to set-up an on-line site I would do it tomorrow!”
At the time of the 2013 investment, BathEmpire owner Chris Li told kbbreview he planned to take on Bathstore, B&Q and Wickes through a significant expansion of the company’s product range, creating a more comprehensive portfolio, rivalling some of the established market leaders “on the bricks-and-mortar side rather than just online”.
Li warned that the market would continue to shift towards online with challenging times ahead for retailers. “The channel shift is going to continue heavily over the coming years,” he said.
In 2012, Li was awarded Entrepreneur of the Year at the Growing Business Awards and his company was voted Small Online Business of the Year at the National Business Awards.
The company has featured in The Sunday Times Virgin Fast Track 100 for three consecutive years and was placed at 64 in the latest rankings after sales to December 2013 rose by 59%.