Former Myer CEO Bernie Brookes to chair Funtastic

Former Myer CEO Bernie Brookes says he “loves a challenege” as he takes chair at Funtastic.

Former Myer CEO Bernie Brooks.

The former chief executive of Myer, Bernie Brookes, who took the department store through its private equity ownership to eventually list on the stock exchange in a $2.4 billion IPO, has been made chairman of struggling toys company Funtastic that has been teetering on the edge of solvency for years and has a market capitalisation of $10m.

The ASX-listed Funtastic (FUN) which has suffered a 99 per cent collapse in its share price since it was trading at just under $4 in 2013, this morning announced its chairman Shane Tanner would step down and Mr Brookes would assume the role of chair from August 1, with shareholders asked to ratify his appointment at the AGM planned for November 18.

The relatively new CEO of Funtastic, David Jackson, is a former senior executive at Myer where he was briefly the business manager for electrical and furniture.

Shares in Funtastic last traded at 4.3 cents.

Mr Brookes said the Funtastic business had potential.

“Funtastic is a business with a rich history and so much potential,’’ he said in an ASX statement this morning.

“I love a challenge and look forward to working with my board colleagues to transform this business — to unlock latent brands, identify and capture new brands and importantly take advantage of the opportunities ahead.’’

Mr Brookes has a long history in retail having rose to senior ranks at Woolworths and later leading Myer when it was carved out of the old Coles Myer conglomerate and owned by private equity before it was floated on the ASX in 2009.

He led Myer as CEO until 2015 after nearly a decade at the helm of the department store, with the retailer beset by earnings downgrades, flatlining sales and profits and a tough trading environment.

But now he faces a new and massive challenge at Funtastic which almost 15 years ago was a high flyer and small-cap market darling before it crashed under the weight of a string of profit downgrades, poor acquisitions, write downs, management losses and a slumping share price that has seen it trade for a few cents.

At its peak of popularity among investors it had a shareholder base the envy of any small-cap company which included investors like Gerry Harvey, Alex Waislitz, Lachlan Murdoch and the Mathieson family.

Funtastic was once an owner of powerhouse toy brands The Wiggles, Bob the Builder, Thomas the Tank, Pillow Pets, Ben 10 and Power Rangers, but a later move into confectionary, film distribution and other non-core businesses sent its profits plummeting.

A pitch by the directors of Funtastic to delist the troubled wholesaler from the ASX in 2017 in order to save on listing fees and enable it to better negotiate a restructure of its debt with the NAB failed.

A string of poorly-chosen acquisitions and business expansion strategies has plunged its accounts into the red with Funtastic posting a loss of $23.4m in 2016 and a loss of $52.8m in 2015. It posted a loss of $33.4m in 2017 but returned to profitability in 2018 with a profit of $28.25m.