French furniture business Roche Bobois has announced that it has signed a letter of intent to acquire a majority interest in its franchised Roche Bobois store in China.

On the back of successful franchise acquisitions in the United States (2020 and 2022) and France (2023), Roche Bobois SA seeks to expand its directly operated presence in this high-potential country where the Group has been active since 2004.

After 20 years operating as a franchisor in China, Roche Bobois SA signed a letter of intent to acquire a 51% majority interest in Shanghai Rock Castle Furniture, the owner of the Roche Bobois franchise in China, which directly runs three stores (one in Beijing and two in Shanghai) and manages 23 franchised outlets located in various mid-sized cities.

“In 2023, China accounted for total retail sales of €23m, including €8m in three stores located in Beijing and Shanghai,” the company said. “As a result, Shanghai Rock Castle Furniture’s EBITDA margin is above that of the US/Canada region (already the Group’s top EBITDA contributor with EBITDA margin of 27.1% in 2023).

“This capital-intensive transaction is expected to consolidate the sales of 3 new directly-operated stores in the Group’s financial statements as well as a complementary franchise/trading activity which would also have an accretive effect on EBITDA. The acquisition of this majority interest should take effect in July 2024.

“As part of this transaction, Roche Bobois will continue to benefit from its partner’s local market knowledge and expertise with teams already in place, combining them the Group’s know-how in organising networks and managing in-store sales animation to further increase the growth and profitability potential of these new stores.”