The linen manufacturer is concentrating on its core business and no longer sells garden furniture. While this makes strategic sense, there were certainly reasons for the unusual coexistence.
The question that the bosses at Calida have been asked more often than any other in recent years is: Why does an underwear manufacturer also have garden furniture in its range? After all, there is nothing in common between silk pajamas and metal chairs, is there? This questioning is now over.
Exotic Portfolio
The traditional company based in Sursee, Lucerne, has announced a transaction that many investors have been expecting or even longing for for years: Calida is selling Lafuma Mobilier, its brand for high-quality garden furniture. Peugeot Frères Industrie, a subsidiary of the Peugeot Group, which operates in the automotive business, has made an offer to buy the company.
How much money the French family group is prepared to pay for Lafuma Mobilier remains unclear. Both parties do not want to comment on the details of the transaction, especially not on the purchase price. What has been announced, however, is that the sale is expected to be completed in the third quarter of the current calendar year.
The move is strategically convincing: Garden furniture always seemed exotic in Calida’s portfolio. The company management justified the sale by saying that the group now wants to concentrate on its underwear and lingerie business. The aim is a strategic realignment on the core brands Calida, Aubade and Cosabella.
A pearl falls away
As logical as the measure may seem from a strategic point of view, the sale must not have been an easy decision for Calida’s management. After all, the more than 300 employees of Lafuma Mobilier, which currently operates in over 40 countries, contributed around 16 percent of the group’s sales last year with revenue of 49 million francs.
Even more importantly, Lafuma Mobilier is considered a pearl in terms of profits. Although Calida does not publish profit figures at the level of individual segments, what management has repeatedly emphasized in recent years is that the Lafuma Mobilier business is highly profitable, thanks to a strong brand name and high-quality, sustainable products.
But the garden furniture not only made a large contribution to profits. There was another advantage: it also helped ensure that Calida’s revenues did not fluctuate too much over the year, but were somewhat evened out. The reason for this is that garden furniture is mainly bought in the first half of the year, whereas linen items are bought in the second.
Investors want focus
But the advantages of the unusual diversification were offset by the disadvantages of a lack of focus. Analysts and investors in particular called for Calida to clearly concentrate on its core activities. This was not least because the development of conglomerates and general stores is more difficult to assess.
Only those directly involved know whether Calida will be well compensated for the sale of Lafuma, in which it has held a majority since 2013. Analysts at the Zurich Cantonal Bank (ZKB) estimate the fair value of Lafuma Mobilier to be at least 60 million francs; that would be almost a quarter of the company’s total value.
However, the ZKB points out a risk: the sale is taking place at an unfavorable time. After the boom of the Covid pandemic, when many households spruced up their gardens, the industry is in a phase of normalization with declining sales. According to the ZKB, the risk that a lower sales price was achieved is correspondingly high.
Founding family with intentions to sell
But Felix Sulzberger feels time pressure. He has been Chairman of the Board of Directors at Calida since April 2023, where he also assumes interim operational management. He was called to Calida by the founding Kellenberger family last year at the age of 72, after having already led the company as CEO for 15 years from 2001.
Sulzberger’s most important task: to quickly give the company a new direction after years of unbridled and unsuccessful acquisitions. “Keep it simple” is the motto of the company boss, who was brought back from retirement and who also attracted attention with his rather bold expansion strategy during his first term as Calida boss.
The purging is in the interests of the founding Kellenberger family. They want to sell their 33 percent shareholding in the medium term. A sale, whether as a package or in parts, could now be easier. Potential buyers are interested in the laundry business. The prospect of having to acquire a furniture manufacturer at the same time may have put off some investors. This penalty is now gone.