Back in black: Greenlit Brands’ Fantastic news

Greenlit Brands is said to have been keen to find a buyer for its two furniture businesses.

Freedom Furniture and Fantastic Furniture owner Greenlit Brands has moved into profitability in the past year despite challenging market conditions, placing the business in a stronger position for a potential trade sale or listing in the months ahead.

The company run by former boss of The Good Guys, Michael Ford, has sold several businesses to pay down debt and now has no outstanding borrowings.

For the year to September 29, the company’s revenue fell 5.8 per cent to $442.7m, but it booked a $7.7m underlying profit compared to a loss in the previous corresponding period, according to its accounts lodged with ASIC.

Greenlit Brands is said to have been keen to find a buyer for its two furniture businesses, which are considered by industry insiders to be unofficially for sale.

However, Quadrant Private Equity has also had Amart Furniture on and off the market.

The business gets shopped to industry operators such as Harvey Norman and Nick Scali, but they have not been keen buyers.

Private equity firms could show interest or the companies could be earmarked for an initial public offering.

Greenlit’s Fantastic Furniture and Freedom retail banners operate 146 stores in Australia and New Zealand, making the group one of the country’s largest furniture retailers. Freedom Furniture’s offering is more middle of the road, compared with the more affordable Fantastic Furniture business.

Greenlit Brands sold Plush Think Sofas to Nick Scali for $103m in 2021 and offloaded discount department stores Harris Scarfe and Best & Less.

Rich lister Larry Kestelman bought the Snooze bedding business that Greenlit Brands owned in 2023.

Greenlit’s accounts a year earlier showed revenue at more than $1bn, but this was with Snooze still under its ownership.

At the time of its last accounts, net losses came with rising higher raw materials input costs and increased supply-chain expenses, as it warned that industrial action at Australia’s ports and terrorism activity along the vital Red Sea channel were constraining supplies, causing shortages and ratcheting up freight costs. Cost-of-living pressures have been compounding the challenges.

Greenlit Brands is the Australian subsidiary of Steinhoff International, which came close to collapse in 2018 following a string of financial scandals.

Furniture retailers say that while trading conditions had been tough in 2024, November and December were better than expected.

The industry largely follows housing market trends.

Harvey Norman is the largest furniture retailer in Australia, with 22.3 per cent market share ahead of Ikea with 11.6 per cent, Amart Furniture with 6.3 per cent while Freedom Furniture and Fantastic Furniture account for 4.7 per cent.

The industry generates more than half of its revenue from lounge and dining room furniture, according to IBISWorld.