A Chinese home furnishings company has offered NOK 5.1 billion (USD 637 million) for Sykkylven-based furniture producer Ekornes, makers of Norway’s popular “Stressless” chairs among other brands. The bid has set off debate over whether a sale would be good or bad for the company and the local community.
One resident of Sykkylven, Ingrid Skogseth, told newspaper Dagens Næringsliv (DN) that the company’s legendary late leader Jens Petter Ekornes would be “spinning in his grave if he heard the family was selling.” While she thinks a sale to Qumei Home Furnishings Group of China will “destroy both jobs and the local community” in Sykkylven, another local resident had a different view. “I’m not worried about jobs,” Gisle Aure told DN. “This will help Ekornes sell furniture abroad.” Norway’s once-mighty furniture industry has faced challenges for several years.
Members of the Ekornes family currently hold 12-13 percent of the company’s shares, while the largest shareholder is already a foreign conglomerate, Nordstjernan of Sweden, with its 17.2 percent stake. Qumei needed to raise its initial offer to satisfy Nordstjernan and now needs to acquire 55 percent of all outstanding shares in order to succeed with a takeover. Norway’s state pension fund, Folketrygdfondet, holds 10.5 percent.
The board of Ekornes, which reported a 2 percent decline in revenues and a 35 percent decline in pre-tax profits for 2017, has recommended selling to Qumei. Its majority owner Zhao Ruihai, has promised that Ekornes will remain based in the mountainous town of Sykkylven, not far from Ålesund in Sunnmøre, and that Qumei will invest in further research and development in addition to international distribution.
There’s no written guarantee, though, that production and jobs won’t be moved to China or other lower-cost countries. “We can only work towards being more competitive, with more automation at the factory,” said Stian Ekornes, son of Jens Petter who still serves on Ekornes’ board and owns shares himself. DN reported the family stands to receive NOK 660 million for its stake in the firm.