Hobby Warehouse Group buy lifts Funtastic growth

Funtastic has reported a strong uplift in sales for its new businesses, including the previously collapsed Toys R Us chain.

Funtastic said that following the acquisition of the Hobby Warehouse Group, which includes e-commerce businesses Hobby Warehouse, Toys R Us and Babies R Us, it had witnessed rocketing growth.

Funtastic, which recently acquired a hobby and toys business to revamp and restructure the once laggard ASX company, has reported a strong uplift in sales for its new businesses, including the previously collapsed Toys R Us chain.

Funtastic said on Monday that following the successful completion of the acquisition of the Hobby Warehouse Group, which includes e-commerce businesses Hobby Warehouse, Toys R Us and Babies R Us, it had witnessed rocketing growth.

Consolidated revenue for November of $7.1m was up 60 per cent and gross profit for November of $2m was up 78 per cent, the company said.

Funtastic said revenue for the first quarter of $14m generated a consolidated gross profit of $3.6m.

The Toys R Us website delivered strong results in November, with total organic and direct sessions (excluding paid search) increasing by more than 200 per cent, and Google search impressions increasing by more than 360 per cent.

Funtastic CEO Louis Mittoni said he was pleased with the performance of the company during this period. “It is indicative of the solid teamwork within our business ­divisions and the strong connection between shoppers and our brands,” Mr Mittoni said.

“Our e-commerce channels contributed the larger proportion of the gross profit and the results are a prelude to what we anticipate in the next several years, with the continued relaunch of Toys R Us, the launch of Babies R Us and continuation of our digital-first e-commerce road map.”

He said the integration of the acquired hobby and toys businesses would be undertaken over the next six months, including a comprehensive review of all product ranges, customer segments and operations.

The growth plan would include implementation of automated supply chain capabilities to increase warehousing capacity and further investment in marketing of its brands and product portfolios.

Last month Funtastic, a beleaguered retailer that has gone through a ­revolving door of corporate reincarnations that has seen it sell everything from vacuum cleaners to Wiggles toys, bought Mr Mittoni’s hobby and toys businesses.

Under a capital raising and reverse takeover, Funtastic bought the Australian e-commerce websites for Toys R Us, Babies R Us, Hobby Warehouse and tech distributor Mittoni.

Hobby Warehouse Group owns one of Australia’s leading baby, toy and hobby e-commerce platforms. It posted earnings of just over $500,000 in 2020.