Since the beginning of this year, the home furnishing industry has been associated with negative keywords such as suicide, detention, and insolvency, leaving the upstream paint industry in a heavy mood.
The founder of Red Star Macalline, Che Jianxin, sold his controlling stake and was placed under detention by the supervisory authorities; Liang Jiaju is insolvent, and its founder, Zeng Yuzhou, committed suicide by jumping from a building; the founder of Juran Home, Wang Linpeng, chose to jump from a building for relief just three days after being released from detention; and Liu Bing, the founder of Fushenmei, was detained... Now, Gu Jia is also in trouble.
On August 5, 2025, Gu Jiangsheng, the legal representative of Gu Jia Group Co., Ltd., had a new execution record added, with the execution target reaching 1.092 billion yuan. The executing court is the Intermediate People's Court of Foshan City, Guangdong Province. According to Tianyancha, this is the seventh time Gu Jia Group has been listed as the person being executed, with a cumulative execution amount of 3.038 billion yuan.
He Jianfeng is the only son of He Xiangjian, the founder of Midea Group. This prince of Midea is unwilling to take over at Midea, but instead sets up his own business, spending 10.299 billion yuan to acquire 29.42% of Gu Jia Home's shares, becoming its actual controller. Since taking over, Gu Jia's stock price has dropped from 36.72 yuan per share to the current 26 yuan per share, with a floating loss of nearly 30%.
Midea's prince He Jianfeng
Gu Jiangsheng is a physical education teacher at Zhejiang Shuren University. He resigned from his public position in 2000 to take over the family business and founded Gu Jia Home in 2006. The company was listed on the main board in 2016, becoming a leading enterprise in the domestic soft home furnishing industry and has appeared multiple times on the Hurun Rich List.
Gu Jiangsheng, who made it onto the rich list, got a bit carried away. In 2018, he set a sales target of 100 billion yuan and launched intensive acquisitions both domestically and internationally, acquiring Germany's Rolf Benz, Italy's Natuzzi (China operations), Australia's Nick Scali, as well as more than ten domestic projects such as Xibao Home and Banerqi.
Gu Jia's founder Gu Jiangsheng
After the explosion in the real estate industry, under policies such as trade-in and stimulating domestic demand, smart home has become the future trend of the home furnishing industry. The giants of the home furnishing industry have become major clients in the eyes of paint companies, but the payment cycle for home furnishing giants to paint suppliers is not so friendly.
Why do pancakes leak? Greed (spreading) too wide.
In the context of a weak market, the negative effects of blind mergers and acquisitions have begun to emerge. Gu Jia's total liabilities have risen from 2.535 billion yuan to 5.959 billion yuan, with the asset-liability ratio soaring to 52.28%, far exceeding that of Oppein and Sophia at the time.
To alleviate financial pressure, Gu Jiangsheng began large-scale reduction of shares from 2020, cashing out a total of 8.04 billion yuan over three years.
As of now, the company has distributed dividends to shareholders 9 times, totaling 6.339 billion yuan, with Gu Jiangsheng, as the major shareholder, receiving approximately 2 billion yuan in dividends.
On November 9, 2023, the Gu Jiangsheng family transferred 29.42% of its shares in Gu Jia Home to He Jianfeng's Yingfeng Ruihe Investment for a total price of 10.299 billion yuan.
He Jianfeng's purpose in acquiring Gu Jia is simple. Midea is in the home appliance business, while Gu Jia is in the furniture business, with 7,000 stores nationwide.
The combination of furniture, home appliances, and intelligent control systems represents smart home, so He Jianfeng's acquisition of Gu Jia is aimed at laying out the smart home sector in advance.
But the ideal is full, and the reality is skinny.
When He Jianfeng took over, Gu Jia's stock price was 36.72 yuan per share, now it is 26 yuan per share, with a floating loss of nearly 30%.
In 2024, Gu Jia's profits fell sharply, achieving revenue of 18.48 billion yuan, a year-on-year decrease of 3.81%, and a net profit of 1.417 billion yuan, a year-on-year decrease of 29.38%. The cash flow generated from operating activities was 2.68 billion yuan, but current liabilities reached 6.998 billion yuan, and interest-bearing liabilities even reached 7.444 billion yuan.
From Gu Jia's founder Gu Jiangsheng cashing out 20 billion yuan and leaving behind 6 billion yuan in debt, to Gu Jia Group being forcibly executed for 3.038 billion yuan, and then to Midea's prince spending 10.3 billion yuan to take over, the layout of smart homes is still unfinished and has yet to form a feedback loop.
In May of this year, Gu Jia Home announced a private placement, raising 1.997 billion yuan by issuing 10.4 million shares at a price of 19.15 yuan per share to Yingfeng Group, controlled by He Jianfeng. The raised funds will be used for projects such as the intelligent transformation of home product production lines, smart home product R&D projects, and AI and retail digital transformation projects. After the capital injection is completed, He Jianfeng will control a total shareholding ratio of 37.37% through Yingfeng Ruihe Investment and Yingfeng Group.
The golden age of home furnishing and real estate linkage has ended, but the golden age of smart home has yet to arrive. At this juncture, the market weakness continues, and some home furnishing giants that rely on real estate, heavy assets, aggressive acquisitions, and high-leverage financing are accelerating their exit due to misjudgment of the situation.
According to the announcement from the People's Court, by the first half of 2025, at least 131 home decoration companies across the country have gone bankrupt, setting a new record for the industry's bankruptcy speed in nearly three years.
Following the real estate industry, the home furnishing and decoration industry has entered a deep adjustment phase. For paint and waterproof suppliers to survive this cycle, low-cost and stable operations are essential. This is both a lifeline for home furnishing enterprises and a way out for paint companies.