There's big news in the kitchen industry - Howdens has announced its acquisition of DIY Kitchens in a £390m deal set to bring a whole new branch to their trade-only business.
Howdens has agreed to acquire the parent company of Ultima Furniture Systems Limited, which trades publicly as DIY Kitchens. Retailer, DIY Kitchens, sells its products exclusively online, which couldn't be more different from Howdens' trade-only business model.
The deal has the goal of expanding Howdens' customer base in the UK with DIY Kitchens' direct-to-consumer approach. This could make planning new kitchen ideas or a renovation project a breeze.
Howdens is already a household name when it comes to kitchen design, but the trade-only business model means that you need to find a tradesman with a Howdens account before you can start making your dream kitchen a reality.
DIY Kitchens manufactures all of its own kitchens using short production runs on a made-to-order basis, which differs heavily from Howdens’ model of using long production runs to manufacture products to stock.
While DIY Kitchens operates exclusively online, with two showrooms in the UK, self-service planning, design and ordering tools are available to provide an end-to-end kitchen design experience.
DIY Kitchens' online channel provides consumers with self-service planning, design, and ordering tools. Its model combines low selling overheads with made-to-order manufacturing and strong cash generation, supported by customer prepayment.
Andrew Livingston, CEO of Howdens says of the acquisition: 'Howdens’ highly successful trade-only model is built around supporting solely trade customers with outstanding in-stock availability, expert local depot teams, and an end-to-end service from design through to delivery. The acquisition of DIY Kitchens, which will be operated on a standalone basis, adds a complementary very profitable, business to the Group, providing access to non-trade end customers through its direct online channel with self-service planning, design and ordering tools.'
'DIY Kitchens shares many of the characteristics that underpin Howdens’ success including well invested manufacturing, strong vertical integration, scalable capabilities and a deep, well-embedded entrepreneurial culture.'
Andrew Livingston continued: 'We are excited to welcome the DIY Kitchens team to Howdens. We have great respect for the innovative business model they have built, and we look forward to supporting the business’s continued growth and investing behind its next phase of development.'
Currently, Howdens is claiming that the two businesses are set to continue to operate as separate entities but who knows - perhaps in the not-so-distant future, buying Howdens kitchens online might become a reality.
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