Malouf, the Nibley-based bedding company, has acquired Downeast, the regional clothing and furniture retail chain that has a presence in Cache Valley.
Those developments became known in a news release from Downeast, which touted the fact that Sam Malouf and his wife, Kacie, were now owners of the Salt Lake City-based company that employs some 700 people and includes stores in Utah, Nevada and Arizona.
“As Utah businesspeople, Kacie and I are excited to work with Downeast — a community staple,” said Sam Malouf in a prepared statement. “They’ve done an excellent job building their brand through a unique product line. We look forward to keeping that momentum while finding new prospects for growth.”
Scott Carr, director of marketing and communication for Malouf, spoke on behalf of its founder, who was not available for an interview on Wednesday. Carr said “brand recognition” was a central reason why Malouf acquired Downeast.
“A lot of people in the Intermountain West know the Downeast brand,” he said. “We definitely wanted to get involved in that and take part in some more consumer-recognized products. We’re hoping to take a lot of what we learned and roll it out to the rest of our company and the rest of our wholesale partners to improve how we service them and the sales they’re able to do in their stores as well.”
In the news release, Downeast’s CEO, Rich Israelsen, described the acquisition as “a new chapter in our company’s history” and he and others in the company were “eager to learn from Sam and Kacie’s leadership.”
Israelsen said he saw a changing retail industry and passing ownership to Malouf would provide an avenue to “to get stronger — much stronger — and create a much more well-rounded opportunity for Downeast.”
“The key is always be looking at how to innovate and become stronger, and this is how we saw that opportunity for Downeast,” Israelsen said.
He also spoke in more detail about the deal between his company and Malouf, saying that in fact it became finalized in March, around the time the coronavirus pandemic broke out.
“We felt very strongly that there were more important things for us to be focusing on … and our desire was not to take away from needing to focus on how to keep people safe,” Israelsen said, noting the numerous measures his stores have taken to comply with the state of Utah and CDC guidelines. “We still have to be very cautious and very careful with how we deal with COVID-19, but I think where people have gotten a little bit more accustomed to the new processes … we felt like this is now an appropriate time" to announce the acquisition.
Downeast was founded in 1991 by the Freedman brothers, who sold discount furniture and clothing along the Wasatch Front. Since that time, Downeast has developed its own brand of clothes and furniture — all of it spanning 40 retail locations in three states. That includes a furniture store at 1050 N. Main Street in Logan and a clothing store at the Cache Valley Mall.
Malouf, meanwhile, has direct roots in Cache Valley, since it was not only started here but was founded by Sam Malouf, a Utah State University graduate. The company — with a trendy-looking building for its headquarters off U.S. Highway 89/91 — makes sleep products.
The acquisition brings Malouf’s top leadership and people who have a knack for branding and marketing, Israelsen said, while merging that with Downeast’s history of retail and the ability to run stores.
“So we really each feel like we’re bringing strengths to the table,” he said.
But several elements will remain the same with regard to the two companies.
For one thing, Downeast will maintain headquarters in Salt Lake City, and its 700 employees will remain as employees for that company. Downeast will also continue to operate its 40 retail locations.
For Malouf, that means acquiring “a playground” to gather more information on shoppers and how they’re interacting with the company’s products, according to Carr. The Nibley-based company allows retailers to sign up and sell its products in stores — something Downeast has not done yet.
“Now we have a direct line to that consumer,” Carr said. “Information like this I’m salivating over because now I can understand more about who the end user of our product is. In existing wholesale relationships, we sell the product … and then they resell in their store, but there’s a lack of communication coming back to us as to what are the demographics of that person? What interested them in our products over one of our competitors?”
As part of the acquisition, Downeast will also sell Malouf’s products at its retail locations and the Cache Valley-based company will market Downeast’s stores and products.
Carr said Malouf’s in-house team of software developers will be able to help Downeast on things like gauging customer feedback, testing new concepts in-store and improving merchandising plans.
There are “a lot of exciting things” as a result of the acquisition that have yet to be announced, Israelsen said.
Carr noted Downeast is not the only company Malouf has acquired recently. Last year, it bought Impact Collective, a technology company based in Utah, to help with Malouf’s nonprofit arm, the Malouf Foundation.