Designer furniture and fashion collide in a British acquisition announced Tuesday.
Digital natives Made.com and Trouva are becoming one company after the former, a high-end furniture and home goods marketplace, made a deal to bring the latter’s home and lifestyle platform in house.
While Trouva’s fashion boutiques component might seem like an anomaly for a designer-focused furniture outfit, Made in May 2020, along with Alibaba investor Eight Roads Ventures, led an investment in Otrium, an online fashion marketplace helping apparel retailers sell end-of-season product that would otherwise go unsold. More recently, it partnered with giving platform Geev to help consumers find a new home for used furnishings and homewares.
Made said the deal affords a better selection of homeware products units while broadening its consumer reach, thanks to Trouva’s 700-plus European boutiques and customers in 34 countries. Trouva’s marketplace technology and cross-border functionality will also enhance operations at Made, which said the feature will improve distribution range, and dropship, carrier integration and inventory management. Made chief technology officer Geert Engels will oversee Trouva’s new tech hub in Portugal.
Launched in 2015 and based in London, Trouva will continue to operate independently led by its current management team, CEO and co-founder Alex Loizou and chief operating officer Dimple Patel.
“This acquisition brings with it an experienced and talented team, a sector-leading technology platform and excellently procured choices of homewares product that will resonate with the Made target customer,” Made CEO Nicola Thompson said. “Trouva’s assortment complements Made’s design-led homeware and home proposition superbly and is a great strategic fit for Made as we continue to enhance our marketplace offer.”
For Trouva, connecting with an established retailer could provide new opportunities for its boutiques.
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“Trouva’s mission is, and always has been, to support independent businesses and showcase their unique home, fashion and lifestyle products to the world,” Loizou wrote to boutique partners on Tuesday.
He said Trouva’s mission wouldn’t change after it becomes part of Made. Made will continue to operate as a design-first furniture and homewares business, while Trouva will focus on its mix of categories and products across homewares, fashion, kids, beauty, lifestyle and more, Loizou wrote, adding, “We’ll continue to handpick the best independent boutiques from around the UK and Europe, giving them a platform to showcase their unique finds and curations to a global customer-base.”
Made said Trouva still operates at a loss, though combining operations should help leverage scale and marketing efficiency to improve the boutique platform’s financial performance. Made’s pre-tax losses grew to 31.4 million pounds ($38.7 million) in 2021 from 14.6 million pounds in 2020, largely on higher freight costs. In addition, about 56 million pounds ($69 million) of sales slid into 2022 due to supply chain delays as sales aren’t booked until customers receive their delivery.
Made expects to reach 1.2 billion pounds ($1.48 billion) in gross sales by 2025, although this year’s EBITDA (earnings before interest, taxes, depreciation and amortization) is guided at 5 million to 15 million pounds ($6.2 million to $18.5 million).
The all-cash transaction for Trouva is expected to help Made efficiently scale its curated offerings, while reducing capex spend. Made said it now expects to spend between 13 million to 18 million pounds ($16 million to $22.2 million) on both the acquisition and capex, versus the prior guidance on capex spend at between 15 to 20 million pounds ($18.5 million to $20.5 million).