Lockdown sales spike furnishes Temple & Webster with massive turnaround

The online retailer will invest further in its infrastructure to tighten its supply chain.

The redemption of Temple & Webster and its online furniture business model is a huge turnaround from its horror run in the first few years.

Temple & Webster chief executive Mark Coulter said the online furniture retailer entered COVID-19 “match fit” to cope with an online shopping rush by consumers locked down in their homes that is now placing huge strains on supply chains, logistics and delivery networks.

Flush with an extra $40m from a recent capital raising, the retailer will invest further in its infrastructure to tighten its supply chain and bind its customers closer to its brand at a time when the business believes Australians will increasingly feel not only comfortable but excited about going online for furniture and furnishings.

Temple and Webster CEO Mark Coulter Picture: Supplied

“What you are starting to see that now everyone is starting to realise that they have to have a digital strategy, all the offline players might have been a little resistant to online but the COVID-19 period has shown them that for customers having a strong online strategy is imperative these days,” Mr Coulter told The Australian after Temple & Webster released unaudited full-year results that showed a 74 per cent leap in sales to $176.3m. It will release its full-year results, including its net profit result, next month.

The stampede to online shopping as the coronavirus pandemic emerged in the second half helped pure-play online retailer Temple & Webster report EBITDA of $8.5m, compared to $1.5m in the prior corresponding period, with sales growth of 130 per cent in the fourth quarter repeated in July.

Such was the huge demand as consumers looked to refresh their rooms with couches, tables and cushions during lockdowns and social distancing, that Temple & Webster reported its first ever $2m sales day in June. It said the number of active customers was up 77 per cent year-on-year, as the company joined other online retailers in benefiting from coronavirus lockdowns.

The redemption of Temple & Webster and its online furniture business model is a huge turnaround from its horror run in the first few years as a publicly listed company when it won the wooden spoon for the worst performing float in 2016 and its shares skidded to 14c.

Temple & Webster shares on Tuesday hit a new high of $8.38 - marking a return of almost 6000 per cent since those lows after its float and up 400 per cent in the past 12 months.

Mr Coulter described Temple & Webster as “match fit” as COVID-19 hit and strong online infrastructure became an important factor in successfully navigating the trading environment.

“What I meant by that is that when we started the calendar year, the second half of 2020, the business was already growing very strongly, we had net promoter scores (customer satisfaction) increasing and already in a good position, we were the brand leader and we had already done all the hard bits around making sure customer economics were right.

“And then COVID-19 hit and essentially what we had to do to ensure we could keep on looking after our customers and meeting their needs during these challenging times was scale the business very quickly. And it was much easier for us to scale from a position of strength than it would have been if we hadn’t done all that hard work beforehand.’’

He said Temple & Webster had invested heavily in assets such as warehousing, logistics, its customer service team, which added more than 160 people, and improving its fast delivery times to people’s homes.

Temple & Webster ended fiscal 2020 with cash of $38.1m (excluding the proceeds from the $40m capital raising) and no debt.

Shares in Temple & Webster on Tuesday ended up 5.5 per cent, or 43c, at $8.21.