Industry News

Nick Scali Puts Rumours Of Steinhoff Buy To Bed

Australia: Nick Scali’s managing director, Anthony Scali, managed to put to rest speculation that the company was about to buy rival furniture retailer Steinhoff Asia Pacific.

Mr Scali is understood to have told investors there were plans ramping up to embark on a dual-track sales process for the company that owns businesses such as Freedom Furniture, Fantastic Furniture, Snooze and Harris Scarfe, but the process had paused.

The understanding is the company’s parent, Steinhoff International, had recently bought itself more time with lenders, so was not a forced seller of the business and would take its time divesting assets. When it does finally get placed on the block, an opportunity for a buyer could be a roll-up in the Australian sector. This is given that Quadrant Private Equity’s AMart Furniture is known to be for sale should a buyer show interest.

However, making money in the space is not thought to be an easy feat, with the owners of smaller furniture outfit John Cootes recently announcing they would close its stores across NSW and the ACT.

Nick Scali said at the results yesterday the liquidation sale of John Cootes would not have an impact on the company’s business given it operated in a different market.

On the back of the results, it appears Nick Scali is in a strong position to buy Steinhoff. It said that despite the weaker market conditions, it remained on track for a strong start to the first quarter of financial 2019, with positive order growth in June, July and August.

Overall, the company said Queensland and Western Australia had been the weakest markets.

The company positioned itself to buy Steinhoff Asia Pacific earlier this year when Anthony Scali offloaded half of his 27 per cent stake in the business to Shanghai furniture company Kuka. Nick Scali Furniture’s market value is AUD486 million so it would need the assistance of its Chinese partners to buy Steinhoff Asia Pacific, which some say could be worth close to AUD1 billion.

(The Australian)

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