Furniture company Brosa collapses, goes into liquidation

The furniture company has been on its last legs since December and as of this afternoon, it has officially bitten the dust.

Embattled Australian furniture retailer Brosa has just been placed into liquidation.

On Tuesday afternoon, creditors of the home decor retailer voted to wind up the company.

The collapsed firm reportedly owes $24 million, including $10 million to customers from unfulfilled orders.

It only has $4.3 million in assets.

It comes just over a month after Brosa went into voluntary administration.

The appointed administrators, Richard Tucker and Michael Korda from insolvency firm KordaMentha, had recommended liquidation.

According to a KordaMentha spokesperson, creditors voted “overwhelmingly” to have the furniture provider liquidated.

Just hours before the liquidation, news.com.au reported on two customers who were frustrated as they had been left without the products they paid for and with no chance of a refund.

Jay Williams is a victim of Brosa’s collapse.

The couch Jay paid for that he has missed out on.

Most of Brosa’s stock had been sold on to e-commerce giant Kogan.com within a week of the company appointing administrators in December in what was dubbed as a “white knight” rescue.

Kogan.com did not, however, absorb any of Brosa’s debts but they did agree to deliver goods to customers if they were already in the storehouse.

That means that an estimated 2500 customers who shelled out thousands of dollars on furniture will miss out.

One of those people is Jay Williams, from Sydney, who spoke to news.com.au earlier on Tuesday, spent $4000 for two sofas right before Brosa’s collapse.

“I’ve just paid a small fortune to move house, then paid a small fortune for furniture, I can’t afford new furniture,” Mr Williams said.

One of Mr Williams’ sofas was “allocated” in the warehouse which means he will receive it in due course.

The other purchase, however, was deemed “unallocated”, which means he will not be receiving it or getting his money back.

Another customer, Jenny, who preferred not to use her last name, is over $2000 in the red because her couch was also not located in the warehouse.

“We are never going to see our furniture and now are not entitled to refunds from the administrators,” the Perth resident lamented.

“I’m a TAFE student, my partner works in hospitality, it’s a huge chunk of money for us. We have sacrificed doing other things, so we could shell out on this couch that we really loved, that would last us years and years.”

Brosa officially collapsed on Tuesday afternoon.

Brosa enjoyed unprecedented sales as e-commerce boomed at the height of the Covid-19 crisis, but has been struggling in 2022.

“The business faced challenges when sales declined after the Covid-19 restrictions were lifted,” one of the administrators, Mr Tucker, said back in December.

“This caused short-term cashflow pressures after a period of phenomenal growth.”

Mr Tucker noted the business “tripled in size during the pandemic”.

The Melbourne-based start-up was launched by CEO Ivan Lim along with co-founders David Wei and Richard Li in 2014.

In 2017, the company made headlines after raising $5 million in Series B funding, with Mr Lim talking up plans to disrupt the $13 billion furniture industry.

There are reportedly more than 60 workers at the firm who are now unemployed, but are expected to receive all their unpaid employee entitlements in full.

Originally published as Furniture company Brosa collapses, goes into liquidation