GigaCloud Technology Inc. (NASDAQ: GCT) announced a definitive Share Purchase Agreement to acquire 100 % of the outstanding equity of New Classic Home Furnishings, Inc. The transaction is valued at $18 million on a debt‑free basis and includes a post‑close earn‑out. GCT will fund the deal entirely from its existing cash reserves and expects the transaction to close on January 2, 2026, subject to customary closing conditions.
The acquisition expands GCT’s B2B marketplace into the brick‑and‑mortar wholesale segment. New Classic, a U.S.‑based distributor with 25 years of experience, serves over 1,000 retailer customers and carries more than 2,000 SKUs. By combining New Classic’s established retail network with GCT’s technology platform, the company aims to create a channel‑agnostic marketplace that delivers end‑to‑end sourcing, payment, and logistics services to manufacturers and retailers alike. Management expects the integration to generate synergies through cross‑selling, shared logistics, and expanded product assortment.
GCT’s Q3 2025 earnings beat expectations, reporting revenue of $332.6 million, up 9.7 % year‑over‑year, and diluted EPS of $0.99, a $0.27 beat over the consensus estimate of $0.72. The revenue growth was driven by a 10 % increase in the U.S. segment, offset by a 3 % decline in the European segment. Gross margin contracted to 23.2 % from 25.5 % in Q3 2024, largely due to higher raw‑material costs and a shift toward lower‑margin product lines. Net income fell 8.6 % year‑over‑year to $37.2 million, reflecting the margin compression and a modest increase in operating expenses related to platform expansion.
New Classic’s financial profile includes approximately $70 million in annual revenue and a healthy profit margin. The earn‑out structure is tied to New Classic’s performance over the next two years, with milestones linked to revenue growth and gross margin targets. The deal preserves New Classic’s brand identity and management team, allowing the company to continue serving its existing retailer base while gaining access to GCT’s technology stack and logistics network.
Management highlighted the strategic fit in a joint statement. GCT CEO Larry Wu said the acquisition “is a pivotal step in building a truly channel‑agnostic B2B marketplace,” while New Classic CEO Jean Tong noted that the transaction “brings the best of both worlds to our retailer customers.” Investors noted the earnings beat but tempered enthusiasm with concerns about margin pressure, indicating a mixed market reaction to the Q3 results.
The transaction positions GCT to capture growth in the home‑furnishings market, diversify its supply chain, and strengthen its competitive moat in the B2B e‑commerce space. The acquisition is expected to enhance long‑term revenue growth and provide a platform for future channel expansion.
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