According to market sources, independent multichannel retailer Lombok, best known for its exotic, colonial-styled furniture, is currently exploring the possibility of a sale, with the aim of funding a series of ambitious growth plans.
Lombok currently operates though one store on Tottenham Court Road, plus a busy transactional website which accounts for 36% of its sales.
Lombok today announced a trading update confirming an 18% increase in like-for-like orders for the last quarter (to January 2016), marking the retailer’s seventh consecutive quarter of positive growth.
According to the update, the company is on track to exceed £5m in orders at year-end, and its gross margins remain consistent at 64%. The average spend per customer across all channels has risen to £712 – up 7% on the previous year.
An article in The Daily Telegraph describes the appointment of advisor Cavendish to explore the sale following a strategic review of the business, and cites a valuation of the company in the range of £10-15m.
Lombok went through a pre-pack administration in 2009, following which it refocused through a multichannel retail model and diversified product offer. Over the past 12 months it has developed in several areas, including the refurbishment of the Tottenham Court Road store including extended floor space, as well as improvements to the windows. Lombok’s website has been upgraded to now include a responsive design that allows for greater ease of purchase, while several in-store services, including an interior design offering, click and collect and trade business have been developed. Further improvement of in-stock ranges now ensures 90% of Lombok's core ranges are available for customer delivery.
CEO Stuart Lewis comments: “We are extremely pleased with Lombok’s performance over the past two years – the ongoing upward trajectory in orders represents solid returns on our recent investments, both in-store and online. The new product ranges have successfully broadened the appeal of Lombok across a wider consumer base and as a result we are seeing an uplift in new customers, as well as regular return customers.”
Steve Keating, Lombok’s principal investor, adds: “The trading environment remains healthy as the economy continues to improve and consumer confidence builds. Customer trends suggest that whilst people continue to look for value and quality, they are increasingly buying more expensive furniture for the longer term. Lombok’s management team has positioned the company well to capitalise on these existing trends, and I am confident that our future plans for the business will continue to drive significant growth.”
According to market sources, supplier relationships would not be negatively affected in the event of a sale. The company's plans include store portfolio expansion in the UK and in other markets where Lombok's business is already strong.