Temple & Webster putting NZ expansion on hold
Temple & Webster has delivered its first profitable year since listing on the ASX, posting strong revenue growth of 41 per cent to A$101.6 million, and earnings before interest, tax, depreciation and amortisation (EBITDA) of A$1.1 million – compared to a loss of $700,000 the year prior.
Additionally, FY19 saw the business end with cash reserves of A$13.5 million and no debt.
“Our strategy of being a category specialist, with a clear customer offering built around the largest range of furniture and homewares in the country, combined with the most inspirational content and the best customer service is working,” Temple & Webster chief executive Mark Coulter said.
“Despite broader retail challenges we continue to buck the trend with record active customer growth, and our first $1 million day in June.”
The online homewares brand also saw customer demand shift from the third quarter to the fourth, due to the impact of the 2019 Federal Election.
“[We were] definitely impacted by the election. Every election we see it, people get a bit nervous,” Coulter said during an investor call on Tuesday.
Coulter said that in order to remain profitable moving forward, and increase the estimated 0.5 per cent market share the brand holds in the local market, Temple & Webster would be increasing its focus on Australia – putting its plans for a soft-launch into New Zealand through marketplace TradeMe on hold.
“We’re still keen on [New Zealand], however we have more work to do in Australia [first],” Coulter said.
In order to take advantage of the local opportunity Temple & Webster is increasing its investment into growing areas of its business, with CFO Mark Taylor noting most investment is into people.
The business has added iOS developers and a mobile content team in order to ensure the brand’s forthcoming mobile app is a good product in its own right, while capitalising on the continued growth of mobile as a primary shopping device for consumers.
According to Taylor, the business has also invested further into private label to plug pricing gaps in its range, ensuring all customers are served.
Coulter said that he believes, with a strong year behind them, that it is the best time to reinvest to take advantage of a “once in a generation structural shift towards online”.
“This reinvestment strategy supports Temple & Webster’s stated goal of becoming the first place Australians turn to when shopping for their homes and work spaces,” Coulter said.
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