Nick Scali shares slide 10pc on CEO sell down

Shares in the furniture retailer dropped 10 per cent when it was revealed the CEO had sold down $50m worth, yet he remains the company’s largest shareholder.

Nick Scali CEO Anthony Scali has sold down his stake in the company but remains committed to the chain and its growth potential. Picture: Hollie Adams

Shares in furniture retailer Nick Scali fell 10 per cent on Thursday after it was disclosed its chief executive and major shareholder Anthony Scali had sold down more than $50m worth of shares he held in the business.

However Mr Scali was quick to declare he remained committed to the long-term future of the furniture chain, its growth agenda and that he had no plans to sell any more shares in the medium term with the block of stock disposed of the first sale of his personal holdings in more than five years.

Speaking to The Australian, Mr Scali also said the retailer was looking forward to a strong Black Friday sales campaign, which has begun, while traditionally Christmas is not a strong trading period for furniture stores with people typically putting off purchasing through the holidays to instead shop for furniture in the new year.

Nick Scali chief executive Anthony Scali remains optimistic about the company’s long-term future despite the sell down. Picture: Chris Pavlich

Meanwhile, shares fell to as low as $10.38 when the stock came out of a trading halt and it was announced Mr Scali had sold 4.6 million shares in a block trade to raise around $50m.

“The partial disposal of Anthony Scali’s shareholding in the company is to diversify the family’s assets and it will increase the free float of the company, with the shares to be sold to institutional investors,” the furniture retailer said in an ASX statement.

Following the sale, Mr Scali, via his family investment company Scali Consolidated, will retain 6.439 million ordinary shares in the company and remain its largest shareholder with ownership of 7.95 per cent of shares on issue.

Scali Consolidated does not intend to dispose of any beneficial interest in its retained shares in the medium term, the company said.

“Certainly, I think the message is that I am certainly committed to the business, I believe in the business, I still have a big stake (in the company) and a lot of money invested in the business,” Mr Scali told The Australia.

Shares in Nick Scali ended down 78c, or 6.71 per cent, at $10.84. The stock is up 6.45 per cent over the last 12 months and up by 105 per cent since November 2018.

Turning to the trading environment, Mr Scali was careful not to provide a specific trading update in terms of sales, but said the current consumer environment seemed “okay”, but that he was looking beyond Christmas to the new year when people think about buying new furniture.

“We don’t trade well in Christmas, our telling month is from Boxing Day onwards. That is the big period for us, that’s when people buy furniture, November is normally not a bad month.

“Black Friday is getting more important for the furniture sector, but it’s not vital.”