On July 5, French luxury furniture brand Roche Bobois Group (Roche Bobois SA) announced that it acquired a 51% stake in Shanghai Rock Castle Furniture, a major franchisee in China. This strategic transaction is an important step in the international expansion of the Roche Bobois brand and aims to accelerate the Group’s growth in the Asian market.
Shanghai Rockcastle Furniture, a historic franchisee in China, currently directly operates 3 stores (1 in Beijing and 2 in Shanghai) and manages 25 franchised stores located in various mid-sized cities. Through this franchisee, the Roche Bobois Group has been operating in China for the past 20 years.
The Roche Bobois Group has acquired a 51% stake in Shanghai Rock Castle Furniture and at the same time signed an agreement allowing it to increase its stake in the company in stages, which will result in the group holding all of Shanghai Rock Castle Furniture’s shares in the medium term.
The company specifically aims to strengthen its brand positioning in the Chinese market and boost medium- and long-term growth in the high-potential Chinese market. It will also strengthen the harmonization of decision-making and operations and processes concerning the Group’s quality standards, with the aim of constant improvement and operating efficiency. This will be done by continuing to leverage the partners’ local market growth, their expertise, and the teams in place to further enhance store growth and profitability.
According to the company’s press release, Shanghai Rock Castle Furniture achieved total retail sales of €23 million in 2023. This figure includes €8 million generated by their three directly operated stores in Beijing and Shanghai. The EBITDA margin achieved by Shanghai Rock Castle Furniture is high, exceeding that of the United States/Canada region (which stood at 27.1% in 2023).
From the date of signing the agreement, Roche Bobois SA will include in its consolidated accounts revenues from the three new company-owned stores in Beijing and Shanghai, as well as revenues from its franchising and trading operations. The Group expects this to contribute approximately €19 million in additional annual sales and €6 million at the EBITDA level. For FY 2024, the full benefit to revenues and profitability will become more apparent in FY 2025, as the financial impact will be consolidated on a pro rata temporis basis.