Dive Brief:
- Ashley Home, an affiliate of Ashley Global Retail, has acquired Resident Home — the owner of Nectar, DreamCloud, Awara and Siena brands.
- The transaction was approved by the board of directors from both companies and officially closed on Wednesday, according to the company.
- As part of the deal, Resident co-founders and co-CEOs, Eric Hutchinson and Ran Reske, will remain in their current positions.
Dive Insight:
The acquisition by Ashley will give Resident, known for mattresses, the opportunity to expand its home furnishings assortment and global footprint.
"We are incredibly excited about the possibilities that Resident brings to Ashley,” Todd Wanek, CEO of Ashley, said in a statement. “In only a few years, Resident has established itself as a premier destination for mattresses, and we believe this merger will strengthen both companies and accelerate our growth trajectories, together bringing more products to more homes."
Resident sells its brands online and through more than 2,500 retailers nationwide as well as in Canada and the U.K.
The fit between the two companies appears to be complementary as opposed to overlapping: Ashley operates more than 1,125 brick-and-mortar locations in 67 countries, while Resident is known for its expertise in data science and e-commerce technology, per the release. The deal will also give Ashley a greater presence in the mattress sector.
“This partnership marks a significant milestone for our team and our journey,” Hutchinson said in a statement. “We believe that together, we can achieve even greater heights and deliver unparalleled value to our customers. Joining forces with Ashley enables new opportunities for growth and our team is excited about the possibilities ahead."
The company in 2017 initially launched with its Nectar brand. Two years later, the company rebranded from DreamCloud Holding to Resident. In 2021, Resident secured a $130 million investment led by Ion Crossover Partners and Nexus Capital Management with participation from Baron Capital Group. The funds were to be used to expand the company’s brick-and-mortar presence and strengthen its supply chain and infrastructure.
The Ashley acquisition of Resident comes at a time when the overall home furnishings market is in a state of flux. While the sector experienced a boost during the early days of the pandemic as consumers spent more time at home, demand has dropped more recently.
The sector has seen declines for several consecutive months, according to data from the U.S. Department of Commerce, with January’s home and furnishing sales down 7.5% year over year. And others in the sector, like Z Gallerie, Mitchell Gold and Bob Williams and Tuesday Morning all filed for bankruptcy last year.
