Australian furniture ecommerce retailer Brosa has been placed in voluntary administration following halted demand post-covid.
Brosa was founded in Melbourne in 2014. The online retailer saw early success as online shopping grew in popularity. The company offered furniture and décor of luxury quality at reasonable prices. According to its website, Brosa was developed with the vision to provide furniture without unnecessary mark-ups accommodating importers and wholesalers. The company “removed importers, wholesalers and high-end stores from the equation, opting for a completely in-house team that manages the Brosa brand.” During the height of the pandemic, Brosa saw great success as people flocked to the internet to deck out the homes they would be spending the majority of 2020 and 2021 in.
“The business tripled in size during the pandemic, developing a strong customer base and technological capabilities that would be an asset to many other furniture retailers,” said administrator Richard Tucker.
The rapid growth led to the expansion of showrooms in Sydney and Melbourne as well as more than 75 employees across the business. Following the easing of lockdown restrictions and customers returning to traditional retail, sales declined. According to Tucker, “this caused short-term cashflow pressures after a period of phenomenal growth.”
On Wednesday, the company was placed into voluntary administration, overseen by Richard Tucker and Michael Korda of KordaMentha. “KordaMentha is seeking urgent expressions of interest in the sale of Brosa,” said Tucker in a statement. The administrators expect there will be a strong interest in the company and notes that, “the company was embarking on a campaign to reduce its inventory holdings and refocus itself as a make-to-order business. We plan to continue this process to clear stock.” It appears Brosa will continue to make sales over the Christmas/New Years period as they seek to clear stock.
The company has various unique assets that may appeal to potential buyers and investors. SmartCompany notes the company has developed protocols around sales and deliveries which could be a good opportunity for any furniture retailer who wants to develop that side of their business.
This announcement comes off the back of a series of companies falling into voluntary administration over the past year. Deliveroo was the most recent victim, abruptly ceasing trading in November, similarily citing the decline in post-pandemic demand following a boom in sales in 2020/2021. Kikki.K was in a similar position in 2021 but was acquired by Brandbank Group in October last year. While Brosa is seemingly in a good position for acquisition, the tumultuous economic environment may yet result in an unfavourable resolution.
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