North East home furnishings retailer ScS has bought an innovative sofa firm in a pre-pack deal that saves 53 jobs.
The Sunderland firm announced it has acquired the brand, domain names, website, intellectual property and stock of Snugsofa.com from the administrators of Snug Shack Limited, for £875,000.
Snug was founded five years ago by Robert and Peter Bridgman as a challenger brand to pioneer the modular sofa-in-a-box concept. It became recognised for its speed of delivery, innovative product design and ability to fit into any home. In the financial year 2021 the company recorded revenues in excess of £30m, up from £7m a year earlier, while also winning industry awards and growing its social media community to more than 300,000 followers.
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However, Snug’s growth ambitions faltered at the end of last year, when it was faced with difficult trading conditions against the backdrop of the challenging economic climate. It called in administrators after seeing a 700% increase in shipping costs, unfavourable exchange rates, and further effects of the cost of living crisis. Although predominantly online, Snug also operates from one store in Leeds and ScS said it expects there to be an opportunity to add Snug concessions to the group’s stores, “providing the brand with significantly improved national visibility and penetration”.
It said: “The board believes the acquisition of Snug represents further progression in ScS’s strategy. Snug’s strong brand and differentiated digital-first offering will complement ScS’s existing proposition, further diversifying its customer base and increasing market share. Going forward under ScS’s ownership we aim to further grow the business.”
ScS told shareholders that Snug’s 53 colleagues had been a significant part of its success, and that the team were joining the group as part of the acquisition.
Steve Carson, chief executive officer of ScS, added: “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.”
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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.”
Snug management said: “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.”
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