Swedish kitchen giant Nobia, the parent company of, among others, Magnet and Poggenpohl has sold German brand Pronorm.
The sale follows a poor financial year for 2009 which saw significant losses as it struggled with the Europe-wide declining market.XPronorm, which has nearly 80 dealers in the UK and Ireland, has been sold to the Dutch kitchen retail company DeMandemaker Groep (DMG) along with Nobia's 50% holding in Culinoma. DMG already owned the other 50% in what was a joint venture.
While the sale will generate SKr 493 million (£45.8 million) in cash for Nobia, it actually represents a book loss of SKr 77 million as it includes repayment of its loans to Pronorm and Culinoma.
"We have recently announced a group-wide restructuring programme and are working on creating a stronger Nobia," said president and CEO Preben Bager.
"After a three-year venture in Culinoma, we have concluded that it is more preferable to prioritise our resources to fully-owned brands. Pronorm is divested as it is a major supplier to both Culinoma and DMG."DMG, under the ownership of Ben Mandemakers, is a market leader in the Dutch kitchen market as well as operations in Beligium, Czech Republic, and Poland. It also produces bathroom sanitaryware and furniture and employs 5,000 people and has around 250 showrooms. Its annual turnover is €1.3 billion (£1.2 billion).
"I am delighted with the news that Pronorm is to join DMG, which has profound expertise in the kitchen furniture market, a strong customer focus and extensive expertise in retailing which will open up new perspectives for Pronorm to develop sales and growth in the UK and other countries," said Jason Grinton, Pronorm UK and Ireland business manager (pictured).
"Pronorm has been a major supplier to DMG for many years and so our brand values and core strengths are well known to them. With the acquisition, they recognise the potential of the Pronorm brand to strengthen their kitchen portfolio and their penetration of the European market. [It] has given us a strong new owner, ensuring the continuity of our business and creating a solid foundation for the future. The sale does not affect the ongoing management of the company or its current running procedures."
Nobia's restructuring announcement corresponded with its poor financial results and included a personnel shuffle at senior management level as well as a "repositioning" of some of its brands. There was also a focus on product sourcing and logistics that will see it vastly reduce the number of products it produces.
All the brands, apart from Poggenpohl, will have their sourcing, logistics and production brought together under one organisation within the group. This means, Nobia said, that the brands will make use of the same carcasses and fronts "to a more significant extent" and the total number of articles in the group will be more than halved.
The new organisation will see the number of suppliers decline and the volumes increase with those that are left. Sourcing from "low cost countries" will rise to 12% by 2012, up from the current level of 1.5%.
Production will continue to be moved to fewer and larger production units. In the past year, the number of plants was reduced from 20 to 16, and this reduction will carry on, the company said.
