Homewares and furnishings retailer posts record profit

Homewares sales spiked last year during the pandemic as consumers decided to update their living spaces while they were spending so much time at home.

Wholesalers and retailers saw their sales increase significantly including Adairs, which saw record sales and profitability despite 43 of its stores in greater Melbourne being closed for almost half the period due to Covid-19 related restrictions.

Group sales skyrocketed 34.8 per cent to $243 million in the last half of 2020 (1H FY21), while underlying group EBIT was up 166 per cent to $60.2 million. Group online sales of $90.2 million accounted for 37.1 per cent of total group sales.

Managing director and CEO, Mark Ronan, says the results show the strategic health, operational excellence and resilience of the business.

“For the group to achieve an EBIT outcome in six months equal to the EBIT of the full year in FY20, which was itself a record for the company, is something every member of the Adairs and Mocka teams can be proud of,” he says.

Indeed, Mocha has performed above expectations with sales up 44.4 per cent to $28 million. The furniture brand was acquired in December 2019 by Adairs.

“While Covid-19 has seen people invest more in their homes, these results highlight the benefits of investing early in our omni-channel strategy, having a passionate team, great unique product, a large and loyal customer base, and a platform that allows our customers to shop with us when, where and how they want.

“Our focus continues to be on delighting and inspiring our customers with new product and outstanding customer experiences both in store and online. Combined with our vertically integrated business model this will deliver continued growth in shareholder value.”

In light of the results, the company announced it will repay the $6.1 million JobKeeper wage subsidy it received during the pandemic.

“I am particularly proud of how our team has responded to the challenges caused by the pandemic. From the early phase of disrupted supply chains and national store closures in FY20 which saw most team members stood down, to the prolonged period of Victorian store and Support Office closures in 1H FY21.

“Even now they are managing a lock down in Victoria and Auckland. Through all of these challenges our team has successfully adapted to position us well to manage and capitalise on an evolving retail environment,” Ronan adds.

Construction of its national distribution centre (NDC) in Melbourne, despite several lockdowns and additional restrictions, remains on track to open in the first quarter of FY22.