Australian furniture group Nick Scali is set to acquire specialist UK home furniture retailer Anglia Home Furnishings Ltd (trading as Fabb Furniture).
Under the acquisition, Nick Scali will acquire Fabb Furniture for a consideration of £2.00, and all of the secured debt owed by Fabb furniture for £3.5m. The Australian business intends to pay £0.5m to exercise the option to exit the existing distribution centre arrangement and also provide a net working capital injection of up to £6m.
Post-acquisition, Nick Scali says it intends to invest further in the existing Fabb Furniture network in order to establish the Nick Scali brand in the UK, in line with its own UK growth strategy, including through store refurbishments and rebranding, the establishment of a new DC and new store openings.
The reinvented store network will then transition to selling the Nick Scali product range, leveraging the group's buying power and supply chain.
The acquisition is expected to complete in mid-May.
Founded in 1979, Fabb operates a 21-store network across the UK, all located in out-of-town retail parks, and predominantly in large-scale formats. The total retail real estate footprint covers over 24,000 sqm.
Nick Scali CEO Anthony Scali says: “The acquisition of Fabb Furniture provides an opportunity to enhance our geographic diversity and scale beyond Australia and New Zealand for the first time.
“The acquisition provides us an immediate entry point into the large UK market with a 21-store network across key locations – a scaled platform to establish the Nick Scali brand and product offering in an attractive new market.
“Fabb Furniture’s gross margin is estimated to be approximately 10 percentage points lower than larger UK competitors on a LFL basis. As we did when we acquired [sofa chain] Plush, we believe we can leverage the Nick Scali buying power, combined with our supply chain and logistics capabilities, to deliver significant gross margin uplift for the UK business.”
