Quadrant private equity partner Marcus Darville says the private equity firm moved swiftly when it came to cutting costs in its furniture business Amart during the global pandemic.
Speaking at the AVCJ Private Equity & Venture Forum Australia and New Zealand event in Sydney on Thursday, the seasoned private equity executive said that with the softening conditions, Quadrant moved Amart stores to locations where they had a smaller store format with cheaper rents.
As a result, Amart now finds ways to save space by initiatives such as displaying sofas on its walls .
Mr Darville told DataRoom that the investment had been successful for Quadrant.
“It is making more money that it ever has”, he said, adding Quadrant had received its invested money back, and saying it was now making cash returns.
He said under Quadrant’s ownership, the furniture was more around Harvey Norman levels in terms of what category it fell under.
“The history is not around that but it is taking a long time for perception to shift.”
Started in 1996, Quadrant has raised $8bn and 13 funds since its inception.
Among the companies owned by its funds are Affinity Education, which Quadrant is placing on the market, Darrell Lea owner Rite Bite Group and gyms business Fitness and Lifestyle Group.
Mr Darville said the trading performance of its gyms business was back at pre-Covid 19 levels.
Amart Furniture in the past has worked with Jefferies as Quadrant looked at a potential sale.
The business, which has about 67 stores, is generating about $100m of annual earnings before interest, tax, depreciation and amortisation.
Amart was founded by billionaire John van Lieshout, who cashed out of the operation by selling to private equity, and at that time, it had a major presence in Queensland.
Ironbridge purchased Super A-Mart in 2006 for $500m before Quadrant Private Equity became a co-owner.
In 2016, Quadrant bought a 25 per cent stake from Ironbridge and boosted performance through taking it to a larger scale that enabled it to buy more of its imported furniture from China and secure better discounts as a result.
As reported by DataRoom in December, speculation exits that before the pandemic hit in 2020, Quadrant was close to selling its Amart Furniture business to private equity firm Allegro Funds.
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