by MONTREAL, Quebec – RTA furniture and baby products specialist Dorel Industries Inc. said it has reached an agreement to sell its remaining juvenile products manufacturing facility in Huangshi, China to Ningbo Xihe Children Products Co, Ltd. for $4 million.
The company said the sale follows the March 2021 sale Zhongshan, China-based juvenile products manufacturing facility. It also is part of the company’s plans to co-develop innovative new products with a more diverse supplier base.
“To re-iterate what we stated earlier this year, our strategic direction for Juvenile is to bring a broader product line to market with greater speed and to decrease complexity and improve cash flow,” said Dorel President and CEO Martin Schwartz. “Our strategic direction is also expected to reduce volatility in the direct costs of manufacturing due to variations in the Chinese currency and commodity prices. Now that we will no longer own facilities in China, we can better focus on co-development opportunities while simplifying the organization and freeing-up resources to concentrate on product innovation and branding across our various markets.”
The company said the sale is subject to approval by regulatory authorities in the People’s Republic of China and is expected to close in the next two months. With the sale, the company expects to incur a non-cash loss of about $13.5 million in the current fiscal year.
News of the agreement follows the recent completion of Dorel’s previously announced purchase of Danish-based ecommerce resource Notio Living for $19 million. Notio Living has been in the home furnishings business for about 25 years and operates throughout Europe specializing in ecommerce.
“This transaction provides a tremendous opportunity to accelerate Dorel Home’s strategy for growth,” said Dorel Home President Norman Braunstein. “The combination of our existing strong portfolio of products and brands with Notio’s distribution capabilities in mainland Europe will significantly augment Dorel Home’s European business where we currently have a successful presence in the United Kingdom.”
