Customers from collapsed company Brosa must pay for furniture delivery

Customers owed millions of dollars from a collapsed furniture retailer will have to pay onerous delivery fees if they want to receive items that are rightfully theirs.

Customers owed millions of dollars from a collapsed furniture retailer are furious to learn they will have to pay onerous delivery fees if they want to receive items that are rightfully theirs.

That’s despite these customers already paying the full amount, including the delivery cost, prior to the company’s demise.

In December, embattled Australian furniture seller Brosa went into administration and then on January 31, it went into liquidation.

The failed firm reportedly owes $24 million, including $10 million to customers from unfulfilled orders.

Other customers have also been left disappointed after discovering that stock originally promised to them in the wake of the company’s collapse has seemingly disappeared.

They are likely to be left with nothing – no furniture and no refund.

Lucy Smith, from the Sydney suburb of Ryde, spent $2278 on a couch in November and fears she has fallen into that category.

“I’ve never seen anything so disorganised in my life, no one wants to accept responsibility,” she told news.com.au.

Brosa went into liquidation at the end of last month.

Within a week of their appointment in December, Brosa’s administrators, from insolvency firm KordaMentha, sold some business assets to e-commerce retail giant Kogan.com for $1.5 million.

At the time it was dubbed as a “white knight” rescue but now customers are saying it’s anything but.

Kogan.com has not absorbed any of Brosa’s reported $24 million of debts, but they did agree to deliver goods to customers if they were already in the storehouse.

However, unsecured creditors have been critical of Kogan.com’s handling of the situation.

Ms Smith was at first informed by the administrators that she was one of the lucky few whose grey sofa was in the warehouse, meaning she would get the item she had paid for after all.

Then last Thursday, after Kogan staff did a stock intake, Ms Smith got another email from the liquidators that crushed her hopes.

It warned her that her couch could not be located. She never received a link for her to pay the delivery fee, which reinforced her fear that her chances of seeing the couch were over.

“I’m left in absolute limbo,” she said. “I’m getting more and more stroppy, where is my lounge?”

“I still have an air mattress as a lounge, I’ve had to go to a physio as a result of it.”

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The email that made Lucy think she would be receiving her couch.

Then this email came dashing her hopes.

Another customer who preferred to remain anonymous pointed out that some customers might find themselves unable to receive a charge back from their banks because they believed that their stock would be delivered to them.

Luckily, Ms Smith said her bank gives her up to 120 days for a charge back.

Then there’s the issue of delivery.

News.com.au understands one customer has been charged nearly $1000 for their item to be delivered. Another was left fuming over a $200 delivery fee issued to them in the past week, even though their original purchase was for $600.

A Kogan spokesperson said the company “never received any proceeds for any orders” and insisted the firm “has passed on the wholesale cost of each delivery with zero mark-up”.

Customers are also allowed to abandon the stock at any time should they decide the delivery fees are too much.

News.com.au understands that Kogan.com spends $100 million on shipping a year and that it’s more expensive to deliver to some parts of Australia than others, particularly bulkier items.

Jay Williams is another impacted Brosa customer.

He paid $4000 for two couches, including this one.

Jay Williams, from Sydney, who spoke to news.com.au last month, spent $4000 for two sofas right before Brosa’s collapse.

“I’ve just paid a small fortune to move house, then paid a small fortune for furniture, I can’t afford new furniture,” Mr Williams said.

One of Mr Williams’ sofas was “allocated” in the warehouse which means he will receive it in due course.

The other purchase, however, was deemed “unallocated”, which means he will not be receiving it or getting his money back.

Another customer, Jenny, who preferred not to use her last name, is over $2000 in the red because her couch was also not located in the warehouse.

“We are never going to see our furniture and now are not entitled to refunds from the administrators,” the Perth resident lamented.

“I’m a TAFE student, my partner works in hospitality, it’s a huge chunk of money for us. We have sacrificed doing other things, so we could shell out on this couch that we really loved, that would last us years and years.”

The Melbourne-based start-up was launched by CEO Ivan Lim along with co-founders David Wei and Richard Li in 2014.

In 2017, Brosa made headlines after raising $5 million in Series B funding, with Mr Lim talking up plans to disrupt the $13 billion furniture industry.

Brosa enjoyed unprecedented sales as e-commerce boomed at the height of the Covid-19 crisis, but had been struggling in 2022 as customers returned to physical stores.