Scan-D Corp (詩肯), which designs and sells teak furniture under the Scanteak brand, yesterday announced a plan to acquire 100 percent of Nova Furnishing Holdings Pte Ltd’s (諾雅家具) shares for NT$228 million (US$7.39 million).
Nova Furnishing is Singapore’s second-largest furniture retailer.
“This is Scan-D’s first acquisition in 26 years, and is an official move to enter the Asian furniture market,” Scan-D chairman Lim Pok Chin (林福勤) told a news conference at the Taipei Exchange.
Photo: CNA
“Since the Singaporean market is saturated, we aim to first target neighboring Malaysia and Indonesia,” Lim said.
Nova, which focuses mainly on the middle and low-end furniture market, has 13 stores in Singapore.
The 16-year-old firm has reported average annual revenue of NT$660 million, net income of NT$68 million and gross margin of 52 percent over the past three years.
“Nova’s past financial performance has been quite steady,” Scan-D chief financial officer and spokesperson Ho Shan-chuang (何山壯) said.
Scan-D would book the investment this quarter, but expects to recover the costs in four years given the average profit of NT$68 million that Nova could generate every year, Ho said.
Scan-D said that after six months of negotiations, the deal is expected to be completed on May 1.
The company runs 121 stores in Taiwan and has offices in the US, Japan, Germany, Singapore and Brunei.
“We have positioned Scanteak as a high-end brand. Scanteak does not use materials from China... We aim to have Nova focus on the low-end market,” Lim said.
The deal is expected to help increase Scan-D’s sales, as its monthly revenue has continued to drop annually since late last year.
In the first quarter of this year, the company’s revenue plunged 20.73 percent to NT$371.22 million, from NT$468.31 million a year earlier, company data showed.
Scan-D launches an average of 10 stores every year in Taiwan.
Kaohsiung’s growing real-estate market has also boosted furniture sales, the company said.
“Taiwan’s market is still promising. This year we will open new Scan Living (詩肯居家) stores in southern Taiwan to contribute to our business,” Lim said.
Scan Living is the company’s second brand and was launched in 2012. It features higher-end leather sofa collections and Scandinavian-style furniture.
The brand contributed 23.07 percent to the company’s total revenue in the first quarter, compared with 20.55 percent a year earlier, company data showed.
Scan-D has no plans to buy Taiwanese furniture companies for the time being, Ho said, adding that most Taiwanese want to own their own business and there is no suitable option in sight.
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