Chinese-controlled Kresta pulls string on strategic review amid sales slide

Blind and curtain retailer Kresta has pulled the string on a strategic review as it unveils a sharp drop in revenue.

Kresta blinds on display.

The nation’s biggest retailer of window coverings and blinds, Kresta Holdings, has triggered a strategic review of its operations after warning this morning of worsening sales driven by weaker retail activity, with revenues for the last six months crashing by 13 per cent.

Kresta (KRS), which is publicly listed and 84 per cent controlled by China’s Ningbo Xianfeng New Material Company, said this morning it had decided to conduct a detailed operational and strategic review to examine “all opportunities available to the company” to restore and maximise shareholder value.

The strategic review, which is being assisted by external consultants, is expected to take 45 days to complete. Kresta also said that Jin Lan Quan has resigned as a director, with two new directors, Li Ding and current Kresta executive Mingming Zhang to join as directors.

Providing a trading update this morning, Kresta said revenue for the six months to June 30 had hit $33.6m, down 13 per cent from $38.5m in sales reported for the same period last year.

“The softer revenue numbers are due to a number of reasons, including weaker retail activity across a number of Australian states, the underperformance of Curtain Wonderland stores and worse than anticipated results in Kresta and Vista.

Kresta has been running for 46 years and has a network of showrooms across Australia and New Zealand.

Kresta CEO Lu Xianfeng. Picture: Supplied

For fiscal 2018 it posted a 11.77 per cent fall in sales to $75.7m and a blow out in losses to $4.469m from $861,000 in 2017.

In 2014 a subsidiary of Ningbo Xianfeng New Material Co, whose major shareholder is Kresta CEO Lu Xianfeng made a $34.5m takeover offer for Kresta. Ningbo Xianfeng was founded in 2003 and is a manufacturer and seller of sun-screening material such as shade cloth.