Dive Brief:

• La-Z-Boy Inc. this week said it will acquire online furniture startup Joybird for an undisclosed amount. The company will supply financial information on the transaction when it reports first-quarter results in August, according to a company press release.

• Privately-owned Joybird is the trade name of Stitch Industries, established in 2014 and headquartered in Commerce, Calif. The company manufactures its custom, mid-century modern upholstered furniture in Tijuana, Mexico. According to the release, the company saw annual revenue last year of some $55 million.

• Co-founders Alex Del Toro, Andres Hinostroza, Joshua Stellin and Christopher Stormer are staying on, with responsibility for sales, customer service, marketing, brand development and overall operations of the Joybird business, the company said. La-Z-Boy’s supply chain capabilities, including procurement and manufacturing, will support those operations.

Dive Insight:

With this move, La-Z-Boy is taking a page from the Walmart e-commerce playbook: appeal to younger consumers and stoke e-commerce by buying a rising startup.

And as with Walmart's acquisitions of a slew of such businesses, including Bonobos and Modcloth, the startups will benefit from the legacy company's deep pockets and established supporting operations. In a statement, La-Z-Boy CEO Kurt L. Darrow made no bones about that.

"[I]t will allow us to better reach millennial and Gen X consumers, leverage our supply chain assets and provide us with a greater presence online," he said. "For Joybird, the speed of its growth has been constrained by limited capital and production capacity. When we combine our world-class supply chain with Joybird's current manufacturing capabilities, it will be able to accelerate expansion and better service its customers, by improving production speed and shortening delivery times, while lowering costs."

Questions remain, though, including whether Joybird can hang on to the spirit and appeal that have made it a winning choice for many consumers, and whether La-Z-Boy can make not just sales but profits from its relatively affordable items. Certainly, it's a good time to grow online furniture sales. E-commerce furniture sales have emerged as a major growth area, rising 18% in 2015, second only to grocery, according to research from Barclays. Some 15% of $70 billion in U.S. furniture sales are now online, according to IBISWorld data. 

It's a crowded space, with legacy players like Pottery Barn well established online, Wayfair growing and new entrants coming in. Amazon in November launched two furniture brands, Rivet (with a mid-century modern design flair) and Stone & Beam (with a farmhouse or cottage approach). Target's new "Project 62" furniture line and eclectic home brand Opalhouse, meanwhile, are part of that retailer's renewed commitment to differentiated merchandising, and Walmart earlier this year similarly unveiled an online furniture site revamp.