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Conforama Enters Talks With Mobilier Europeen to Challenge Ikea

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Dec. 4 (Bloomberg) -- Conforama, the world’s second-largest furniture retailer, is in exclusive talks for a strategic partnership with Mobilier Europeen to strengthen its foothold in France amid competition from Ikea Group.

The accord foresees sharing sourcing and logistics and the purchase of Mobilier Europeen stores in France and Switzerland, the heads of both companies said today at a presentation in Paris. It would also give Conforama the option to buy as much as all of Mobilier Europeen’s Fly furniture chain, which accounts for more than 70 percent of the closely held company’s 706 million euros ($957 million) in pretax sales, they said.

Conforama, owned by Steinhoff International Holdings Ltd., and Mobilier Europeen are joining forces to challenge Ikea, the world’s largest furniture retailer, in France where the furniture market will at best stabilize in 2014 after contracting in the past 18 months, Conforama Chief Executive Officer Thierry Guibert said today.

The alliance “will help protect our two principal brands Fly and Conforama in the future,” Guibert said, declining to disclose financial terms of the possible deal. Conforama and Mobilier Europeen would have a combined 21 percent of the French market, compared to Ikea’s 18 percent, he said.

Steinhoff acquired Conforama in 2011 for 1.21 billion euros from Kering SA, the owner of the Gucci luxury-goods brand then known as PPR SA. The South African company is close to acquiring Austrian furniture retailer Kika Mobel-Handels GmbH, Guibert also said today.

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net