ScS completes acquisition of modular sofa-maker Snug
Sofa in a box pioneer Snug has been acquired by SCS.
A team from Evelyn Partners has completed the sale of the business and assets – including the stock, brand, domain names, website and intellectual property – of Snug Shack Limited (‘Snug’) to Snug Furniture Limited, a newly incorporated subsidiary of ScS Group plc (‘ScS’) as part of a pre-pack administration deal which sees all jobs preserved.
Snug was founded in 2018 as a self-funded challenger brand and widely recognised for its speed of delivery, innovative product design and ability to fit into any home.
In 2021 the company recorded revenues in excess of £30m, up from £7m a year earlier. As a digital-first company, the brand has subsequently grown a social media community of over 300,000 people and garnered multiple industry awards.
Despite big ambitions and growth plans for 2022, Snug was faced with difficult trading conditions against a backdrop of a challenging economic climate. In particular, a 700% increase in shipping costs, unfavourable exchange rates, and further effects of the cost of living crisis. All circumstances that have affected the wider retail sector.
ScS is one of the UK’s largest retailers of upholstered furniture and floorings, with close to 1,900 colleagues working in the UK. This acquisition provides an opportunity to further increase market share.
As part of the agreed deal, Snug’s website and its Leeds pop-up store will continue trading as normal, with as little disruption as possible.
Statement from Snug management: “It has been a rollercoaster few years balancing exponential growth with supply chain challenges and growing a team remotely through Covid. Snug set out to disrupt the industry with fast and convenient delivery of modular sofas, and this new partnership with ScS supports us in our ambitions to be a leader in the industry.
“Snug’s loyal customer base has been the foundation of our success since the beginning, and we’re now looking forward to continuing this journey with their support and the support of such a well-respected and established partner.”
Steve Carson, Chief Executive Officer of ScS, commented: “Snug is an exciting and young business with great potential. It has a strong and recognisable brand, a differentiated product and targets a market that complements our proposition. In that regard, it presents us with an exciting opportunity to further increase market share. We therefore view it as a great strategic and cultural fit which reinforces our commitment to helping our customers create the home they love. We look forward to welcoming our new colleagues into the ScS family.”
Colin Hardman, partner at Evelyn Partners and joint administrator of Snug, said: “We are delighted to have advised and completed on this sale to ScS, which we consider to be the best outcome for creditors and which preserves 53 jobs, while also maintaining a continuity of trade.
“We thank Snug Shack management for their support in this process. We will be continuing to work with the new owners to ensure a smooth transfer of operations and to minimise any disruption to customers.”
Mark Ford, partner at Evelyn Partners and joint administrator of Snug, added: “We are delighted to rescue this pioneering and much-loved brand and, as well as management, we want to thank all the key stakeholders including staff, the bank and critical suppliers for helping make this happen.”
The news comes as last month, Made.com, which floated on the London Stock Exchange in 2021, collapsed into administration and was snapped up by Next for a modest sum.
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