Former Harvey Norman boss flags design-led turnaround at FreedomOctober 12, 2020
Mr Callard has hired a new design team, led by Kmart’s former head of design Kate Hopwood, and changed 75 per cent of Freedom’s product range to better reflect Australian lifestyles and preferences for natural materials, such as timber, glass and stone, that emerged during the pandemic.
“It’s more like Coco Republic than West Elm or Williams Sonoma,” he said.
Most of the new range will be introduced by the end of November and the balance in early 2021.
At the same time, Freedom is refurbishing and rebranding its 58 stores – 10 by the end of November and the rest in 2021 – making them look lighter and brighter, and launching a new website in November.
I’m very bullish about this turnaround and what we can do.
— Blaine Callard, Freedom
Mr Callard said consumers still wanted to touch and feel furniture and homewares in stores but an omni-channel strategy – enabling consumers to shop seamlessly at stores and online – was the way of the future for the sector.
Freedom’s online sales more than doubled last year to reach 15 per cent of total sales – “even with a very rickety website” – and Mr Callard expected them to rise more than 100 per cent over the next 12 to 24 months.
Greenlit Brands, formerly known as Steinhoff Asia Pacific, is still hoping to float Freedom’s larger sibling, Fantastic Furniture, before Christmas, even though fund managers said the process had gone quiet since a non-deal roadshow almost a month ago. Analyst briefings are expected to start in a week or two.
Mr Callard said Greenlit Brands had no plans to take Freedom public but a change of ownership was likely in 12 to 24 months, once the business had turned around.
Mr Callard expects $250 million in sales from company-owned stores and $50 million in sales from franchised stores this year.
“I’m very bullish about this turnaround and what we can do,” he said. “Freedom is a great brand that hasn’t traded well – this is not financial engineering, this is a product- and retail-led change.”
Greenlit Brands plunged to a $288 million loss last year after booking $154 million in goodwill write-downs and losing $125 million from its general merchandise businesses Harris Scarfe and Best & Less, which were sold in December.
Greenlit has been selling assets to reduce debt and further distance itself from its parent, Steinhoff International, which has offered about $US1 billion to settle $US8 billion in creditor claims stemming from a global accounting scandal.