Karat Home completes acquisition of Z Gallerie assets

Purchase includes lifestyle retailer’s intellectual property and assets to support its e-commerce business

FORT WORTH, Texas — E-commerce furniture platform Karat Home has completed its purchase of the e-commerce assets of retailer Z Gallerie, which filed for Chapter 11 bankruptcy this past October.

The transaction was finalized on Jan. 19.

Officials did not reveal a price or other terms of the acquisition, which includes the retailer’s intellectual property and assets to support its e-commerce business.

This includes some 8,000 SKUs in the Z Gallerie product portfolio along with the retailer’s dedicated distribution and staff at its 230,000-square-foot Gardena, California warehouse. It joins Karat Home’s two other warehouses in New Jersey and Houston, providing an established coast-to-coast distribution network for the line.

Karat Home, a U.S. subsidiary of Chinese manufacturer J&S Yard, described the purchase as a strategic milestone for the company, as it will expand its footprint in the home décor and e-commerce channel, “solidifying its commitment to providing high quality products and exceptional customer experiences. The acquisition aligns with Karat Home’s vision to enhance its product portfolio and strengthen its position as an industry leader.”

Scarlett Fan

In an interview with Home News Now, Karat Home CEO Scarlett Fan said the company was pleased to announce the acquisition. She noted that the Z Gallerie consumer website has been relaunched and will operate independently of the Karat Home portal, which primarily serves as a B2B resource for brick-and-mortar retailers and other e-commerce customers such as Wayfair.

“We think of Z Gallerie as a really unique brand,” she said. “Z Gallerie has great loyalty from the consumer and we will definitely run Z Gallerie as a separate business and will have a whole different business strategy for Z Gallerie.”

The company will use its product development and manufacturing experience of its Chinese factory to build product for the Z Gallerie line as well as other shared services within the supply chain.

However, in addition to having its own dedicated website, the Z Gallerie segment will have its own marketing and sales support, noted Jie Melchiors, general manager of Karat Home.

Fan added that selling directly to consumers on the Z Gallerie platform, the company will now have an even greater inside track into which styles are resonating with customers in the marketplace, which will in turn help guide its product development for retail accounts.

“To have more understanding about the end consumer, that will definitely help the whole Karat Home business, whether on the wholesale side or the DTC side,” she said. “The more we are in touch with the end user, the more we understand what value to supply and we can help our B2B business provide a better solution for the end user. We can help them be successful and this will help us be more successful.”

Melchiors described the acquisition as a major strategic move for the company.

“Acquiring Z Gallerie is also about gaining more customer trust and exposing our company as a player in the industry,” she added. “As an overseas manufacturer, we know the importance of how the brand works in the consumer market. Becoming part of this brand is a big milestone for us. Having this legacy brand will enhance our presence in the United States.”

Karat Home added that it “will work diligently to seamlessly integrate Z Gallerie into its operations, ensuring a smooth transition for both employees and customers. The company remains steadfast in its mission to provide unique and trendsetting home decor solutions.”

The company also noted that Z Gallerie owner CSC Generation assisted with the closing of the transaction and that CSC will provide ongoing transition services. Charlotte, North Carolina-based Stump & Company served as investment banker to the seller.

Karat Home officials also will be at the Las Vegas Market next week where it will be meeting with vendors, customers and service providers. 

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 tom@homenewsnow.com and at 336-508-4616.

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