Advent expands China mattress market foothold
Advent International has expanded its presence in China’s growing mattress and sleeping products market with a new platform combining existing portfolio company King Koil and local counterpart Serta China.
Advent acquired a majority stake in King Koil from CITIC Capital Partners for an undisclosed sum in 2016. The private equity firm also owns Serta Simmons Bedding, a US mattress maker that entered China in 1998 through a licensing arrangement with Hong Kong's Airland Group.
Serta China has now entered into a new joint venture with King Koil, with Advent providing financial support. Serta Simmons has acquired a minority stake in the JV and granted the entity a new Chinese distribution license for Serta products. Serta China and King Koil will maintain their separate brands and operate independently under the newly created company.
King Koil operates more than 420 retail outlets in 200 cities in China and claims to be the local leader in the premium mattress space, including luxury hotel supply and online sales. Serta China encompasses more than 1,400 retail outlets in about 400 cities. China is the second-largest market for the Serta brand behind the US. Stephen Wang, CEO and co-founder of King Koil, said Serta had an "impressive share" of the B2C offline mattress market in China.
According to a release, the JV will leverage a multi-brand portfolio and complementary manufacturing capacity across Shanghai, Chengdu and Huizhou to improve operational efficiency and customer experience. This effort aims to exploit expected growth rates of 10% and 20% per year in China's standard and premium mattress segments, for the next few years.
"With Advent's extensive experience in the consumer and retail sectors, we look forward to supporting the expansion of the new platform's product line and the further growth of the Serta China and King Koil China brands, channel, innovation and team, which we consider a priority for the future business," Andrew Li, a managing director and co-head of Greater China at Advent, said.
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