Nick Scali is set to break into the British market by acquiring Fabb Furniture, a specialty UK home furniture retailer. This strategic acquisition marks the Australian brand's first foray into global expansion, fulfilling a vision long nurtured by its leadership.
Fabb Furniture, operating with 21 stores located in retail parks across the UK, will be rebranded under the Nick Scali banner. The deal, valued at approximately $60 million, will be funded through a combination of equity raisings. Nick Scali plans to raise $46 million through an underwritten institutional placement, with CEO Anthony Scali committing an additional $4 million. Moreover, there will be a non-underwritten share purchase plan to raise up to $10 million.
Photo: Nick Scali.
Anthony Scali, Chief Executive Officer of Nick Scali, expressed his anticipation for this significant move, revealing a five-year contemplation of the UK furniture market. He hinted at the possibility of further international expansions, with eyes potentially set on the USA or Canada if the UK venture proves successful.
To facilitate the acquisition, Nick Scali will take over Fabb Furniture's secured debt and working capital obligations. Additionally, plans include the establishment of a new distribution centre in Peterborough, north of London, and the rollout of new stores across the UK.
Despite challenges in the UK furniture market, Nick Scali remains optimistic about the prospects for its rebranded stores and product range. Leveraging its robust buying power and efficient supply chain, the company aims to resonate with British shoppers and carve out a significant presence in the region.
The UK business, reporting £34 million in revenue and £14.1 million in gross profit for the year ending March 31, is expected to return to profitability within 18 months. Once finalized, the deal will be reported as a standalone segment, further solidifying Nick Scali's position in the global furniture market.
Source: www.afr.com