An Australian retailer has announced that it expects its UK operations to incur a loss of up to £3 million in the six months ending December. This forecast is primarily attributed to ongoing changes within its 20-store Fabb Furniture chain, which the Australian retailer Nick Scali is currently transforming.
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During the annual general meeting, Managing Director Anthony Scali explained that the anticipated deficit reflects both trading challenges and one-off integration costs, as well as a non-cash accounting expense.
UK sales
Referring to UK sales, the company has announced: 'Written sales orders are affected by a combination of tough market conditions, long lead times due to supply chain disruptions, and the commencement of store refurbishments. Trading is expected to deteriorate further in the first half of FY25 as disruption increases due to store refurbishments and change in the product range.'
Stores featuring the complete Nick Scali range will be rebranded to align with the company's original plan following its May 2024 takeover. The London-area showrooms will be among the first to undergo remodelling.
Nick Scali has already initiated restructuring efforts expected to result in seven-figure cost savings starting in early 2025. However, the retailer noted that the turnover for the second quarter in the UK—covering the three months ending in December—is anticipated to fall below the first quarter's performance, which benefited from an elevated order book.
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Nick Scali
www.nickscali.com