Equity Firm Taking Stake In Fast-Growing Furniture Retailer In China

June 7, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2007 According to published reports, Warburg Pincus, a New York-based private equity firm, is in talks to acquire a major share of Shanghai-based Red Star Furniture Group, which operates 33 stores on China’s affluent east coast.

Reuters, citing anonymous sources involved in the discussions, reported Thursday that Red Star is thriving as China’s growing ranks of home owners spend heavily to decorate new apartments. Warburg Pincus has also expressed interest in purchasing a share of China’s Wanfujing Department Store chain.

The China Securities Journal reported that Warburg Pincus would buy a 20 percent share of the furniture retailer for about $196 million. Last year, the equity firm invested $125 million in Gome, China’s largest appliance chain.

According to the Chinese publication, the nation’s furniture market has been growing by more than 30 percent a year for the past three years.

With investments in more than 100 companies worldwide, Warburg Pincus has more than $20 billion in assets under management.