New Jersey bankruptcy court OKs sale of Z Gallerie e-commerce assets to Karat Home

Transaction is expected to close around Jan. 15

HACKENSACK, N.J. — The U.S. Bankruptcy Court for the District of New Jersey has approved the sale of Z Gallerie’s e-commerce assets to home textile and e-commerce resource Karat Home.

A Dec. 29 asset purchase agreement between Karat Home and debtor/Z Gallerie parent company DirectBuy Home Improvement spells out the terms and conditions of the sale, which is expected to occur on Jan. 15.

According to a Jan. 4 court filing, the purchase price would be $7.2 million along with the assumption of any liabilities associated with this part of the business.

The assets it would purchase include all internet properties and data relating to Z Gallerie’s e-commerce business as well as all data associated with products listed on the website including photos, images, videos product descriptions and specs, and related vendor information, to name several.

The assets also include remaining inventory in the distribution center of the seller as of the closing date, as well as product in transit to this facility.

The sale does not include Z Gallerie’s physical retail stores, which were in the process of closing as the sale agreement between Karat Home and DirectBuy was being developed and completed toward the end of 2023.

The sale of the e-commerce business to Karat Home is the latest major development for the retailer, which filed for Chapter 11 bankruptcy protection on Oct. 16.

In the weeks prior to the holiday season, Karat Home was identified as a preferred bidder for the Z Gallerie e-commerce assets.

A subsidiary of Chinese furniture and textile producer J&S Yard Home Fashion Co. and a long-time supplier to big-box retailers such as Home Depot, Costco and Michael’s, it launched its furniture e-commerce business in 2018, further branching out into the online distribution sector through partners such as Amazon and Wayfair.

With gross income of $75 million by the end of 2022, the company said that it operates three warehouses in New Jersey and Texas and also has 12 third-party warehouses in Texas, California, New Jersey and Washington.

Charlotte, North Carolina-based Stump & Company is representing Z Gallerie in the transaction.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at and at 336-508-4616.

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