When Home Depot bought the company for $1.4 billion in January 2016, it was the largest acquisition in the company’s history.
Today, it is the fourth largest buyer of home furnishings.
The Home Depot deal came just one year after the retailer announced it had acquired Zara, the largest online clothing retailer in the world.
Both deals were aimed at boosting Home Depot revenue and margins, as Zara’s customers gravitated towards the retailer’s affordable clothing options.
While Zara has been growing rapidly over the past two years, it has struggled to retain and retain loyal customers, particularly young people, according to data from research firm NPD Group.
In February, Zara reported its lowest quarterly sales in nine years, as more customers chose to shop at Home Depot instead.
“Zara has a growing presence on the internet, but has had to make an enormous investment in building out its brand in an increasingly globalized market,” said Robert Rizk, the NPD analyst.
“I think the biggest challenge for Zara is it has to get its brand out to more people who might not be familiar with HomeDepot and its offerings, and also in an environment that has made Home Depot a very attractive and convenient shopping option.”
Home Depot and Zara did not comment for this story.
The retailer’s success has also made it attractive to some potential acquisition targets.
Last year, the company was able to secure a $2 billion financing round led by private equity firm Renaissance Capital.
Last month, the retailer also signed a new $3.2 billion loan agreement with Bank of America Merrill Lynch.
Both of these deals will help the company attract a wider pool of investors to its $4.2 trillion cash pile.
Home Depot also has a strong position in the home furnishers category, as the retailer has a substantial presence in the industry.
In the last quarter of 2016, the brand sold 4.6 million homes, according an analysis by research firm Brandwatch.
It also sells more than 1 million furniture items, according the company.
Zara is growing at a faster rate, however, and Home Depot is not as aggressive in trying to acquire the company, according Rizg.
That’s due to its strong brand and the fact that Zara recently raised a $3 billion round led from Deutsche Bank and others.
“Zara also has the luxury of the best brands in the marketplace, and we believe we have an even stronger pipeline of great brands,” Rizgh said.
“We’re a global leader in home furnishies, and that’s what we’re focused on.”
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