Nick Scali acquires UK retailer Fabb Furniture to mark global expansion

Nick Scali, Australia's leading furniture importer and retailer, has announced its entry into the UK market through the acquisition of Anglia Home Furnishings, which trades as Fabb Furniture. This marks Nick Scali's first foray beyond Australia and New Zealand as it looks to enhance its geographic diversity and scale.

Transaction snapshot

  • Deal value: Nick Scali will pay just £2 ($3.82) for Fabb Furniture, but will assume £3.5 million ($6.7 million) in secured debt, and up to £6 million ($11.5 million) in working capital injection.
  • Deal multiples: N/A
  • Deal type: Acquisition
  • Investors: Nick Scali to raise $46 million through an underwritten institutional placement, $4 million through a conditional placement to CEO Anthony Scali, and up to $10 million through a non-underwritten share purchase plan.

Founded in 1979, Fabb Furniture operates 21 large-format stores across key locations in the UK. The acquisition provides Nick Scali with an immediate entry point into the £24 billion ($45.8 billion) UK furniture market and a scaled platform to establish its brand and product offering.

For the financial year that ended on 31 March 2024, Fabb is expected to deliver a revenue decline of 19% to £34 million ($65 million) and a loss of £2.8 million ($5.4 million), which is around £1 million ($1.9 million) down on the previous year's result. Fabb Furniture's gross margin is estimated to be approximately 10 per cent lower than larger UK competitors on a like-for-like basis.

Post-acquisition, Nick Scali plans to invest in the existing Fabb Furniture network, including store refurbishments, rebranding, establishing a new distribution centre, and opening new stores that will transition to the Nick Scali product range. The company expects to leverage its buying power, supply chain, and logistics capabilities to deliver significant gross margin uplift for the UK business, similar to its acquisition of Plush.

CEO Anthony Scali expressed confidence in the opportunity, stating, "The acquisition of Fabb Furniture and entry into the UK market is an important strategic step for Nick Scali which is expected to unlock a significant opportunity for profitable growth in the future."

The acquisition is expected to close in mid-May, subject to customary conditions. Nick Scali expects the UK business to return to profitability within 18 months, although losses are set to increase temporarily in FY25 during the transition period.

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