The Container Store has acquired Chicago-based home storage solutions and closet organization company Closet Works for $21.5 million as it looks to expand its manufacturing capabilities and design customization offerings.
The Container Store already manufactures component-based systems through its wholly owned subsidiary Elfa. With the acquisition of Closet Works, the retailer will expand its manufacturing capabilities to include wood-based spaces and enhance its premium wood-based product offering.
The acquisition also provides The Container Store access to equipment and facilities that are centrally located in the U.S., allowing the company to maintain quality control from manufacturing through to installation. The acquisition will allow it to expand its design customization options to a range of spaces in the home, including closets, home offices, pantries, laundry rooms and murphy beds, with garages in particular being an area The Container Store has identified as a growth opportunity.
“As part of our effort to double our sales over time, I am thrilled to announce our strategic acquisition of Closet Works,” said Satish Malhotra, President and CEO of The Container Store in a statement. “This acquisition allows us to meet the growing consumer demand for premium wood-based spaces and expand our capabilities in an effort to gain a larger share of the estimated $6 billion custom closet market – particularly in spaces above $2,000 – with expanded profit margins.”
Closet Works President and previous Co-owner Tom Happ has joined The Container Store as President of Closet Works and will assist with the integration.