BHG has grown to be the leading online retailer of DIY and home furnishing goods in the Nordics, with a market share of ~30%. The group has also expanded into Eastern Europe through the acquisition of Furniture1. The drop-shipping model is a key success factor for BHG, but it has recently established an in-house solution for last-mile deliveries, allowing for an increased range of services.
We believe that BHG could reap the benefits of a fast-growing online market within Home Improvement. In addition, we see room for the company to fuel growth further through M&A, while a greater share of proprietary brands could support its margins going forward.
A global recession caused by COVID-19 could put a dent in demand. We do not rule out that new market entrants could compete for BHG’s No.1 spot. BHG runs a clear acquisition-driven agenda. Hence, there are naturally some M&A related risks.