While we pressed pause on print during lockdown, we were instrumental in keeping the industry up-to-date with the latest news online. Over the next five pages, we bring you a roundup of the major headlines from that time
One of the biggest stories to break concerned Lux Group Holdings’ bid to buy Poggenpohl out of administration and how it was pipped at the post at the last-minute by Chinese bathroom giant Jomoo Group
Poggenpohl: the full Lux Group story
APRIL 28
WHEN POGGENPOHL in Germany fi led for insolvency, few could have predicted the rollercoaster ride that would follow and how Lux Group Holdings, which looked sure to be successful with its bid to buy it out of administration, was pipped at the post in a “midnight hour” decision
to sell to Chinese
bathroom giant Jomoo. In an explosive exclusive interview with kbbreview in July, Lux Group owner Ron Shemesh (pictured)said: “We believe that we are the ‘contract vendee’ and we were induced into spending millions of euros on due diligence and legal fees to develop fi nal contract documents. We were ready to close the deal as per the binding offer that was, without doubt, accepted.” Shemesh added that he believes there is “resistance” from Poggenpohl dealers around the world. “[They] were quite keen to buy a refreshed Poggenpohl ‘German’ brand and not a ‘Chinese’ product. If Jomoo is given permission to conclude the deal, I predict they will endure massive losses as they will have inherited large operational costs in an increasingly
4
weak and complex market.” After
Poggenpohl fi led for
bankruptcy at the end of April, Lux Group Holdings, the owner of Smallbone of Devizes, Mark Wilkinson and McCarron and Co, emerged at the end of May as a front runner to buy the German brand and told kbbreview that it was “close” to a deal to buy the troubled German kitchen brand. This, hot on the heels of unveiling its plans for a new £15 million, 15,000sq ft fl agship store in London’s Knightsbridge due to open later this year.
Prior to Lux Group coming forward with its bid, rumours swirled around the industry with names such as Chinese retail giant Red Star Macalline and family-owned German logistics outfi t Schröter Zeitfach KG as possible candidates to save Poggenpohl. In early June, Liam Hopper, boss of Leicht Kitchen Design Centre group, tabled a bid for Poggenpohl’s UK operations, dependent on the German administrators dividing the company up and selling it piecemeal.
Lux Group then announced in June that it had acquired the Poggenpohl brand and all its assets. It said the acquisition would be “the start of a revolution
that will ‘transform the
kitchen industry like Tesla did in the automotive industry”. Entrepreneur and Lux Group chief value creation offi cer Ron Shemesh was to lead the bid, and said it would “merge the best technology with best of class luxury offerings”.
The group pledged to invest €50 million (£45.2m) in the German brand and said that the Wolf Family Offi ce, headquartered in Singapore, would provide support as a fi nancial investor and also act as the German partner. The news that Lux had bought Poggenpohl was welcomed by the KBB industry and former Poggenpohl UK global sales director Martin Gill commented at the time: “Well done to the Lux Group. An excellent fi t, which should have happened years ago. I’m so pleased for the Poggenpohl family. Watch this space as Poggenpohl goes from strength to strength!” The celebrations were not to last long, however, as the German administrator announced on July 10 that the Chinese Jomoo Group had in fact signed a contract to buy Poggenpohl for “an undisclosed sum”. Clearly referring to the Lux Group bid, he added:
“A recently announced
purchase by another investor did not come about.”
Lux Group and Wolf Family offi ce, however, contended that they had been gazumped on the agreed deal literally as their pen hovered above the dotted line and kbbreview understands that this may lead to a legal challenge. As for Jomoo, it said it was
“committed to Poggenpohl’s pro - duction site in Herford and will take over a large part of the company’s workforce.” Poggenpohl CEO Gernot Mang would continue to head the company under Jomoo.
Xiaowei Lin, general manager of Jomoo Germany said: “As a critical part of Jomoo’s long-term sustainable market and product strategy, we value the need to cover well the high end and premium market segment. We have seriously considered the opportunity to work with or acquire an established brand with high quality and design reputation for a while. Such a brand should preferably have a long- standing history, well-known around the world and be well respected with a reputation for craftsmanship and excellence. Poggenpohl meets such criteria and fi ts nicely into Jomoo’s market strategy in expanding its kitchen ware and cabinet offering.” Poggenpohl fi led for insolvency at the end of April, blaming “a considerable decline in orders and sales since the outbreak of the Covid- 19 pandemic”.
The rapid drop in business caused “liquidity bottlenecks” that could not be eased with changes in working hours or reducing production and, as the company was in the middle of restructuring, it could not take advantage of German government aid. The company continued to trade between April and June while a new investor was sought by the administrators.
· September 2020
LOCKDOWN NEWS ROUND-UP
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