Only a week after falling into voluntary administration, luxury furniture retailer Brosa has been saved by e-commerce giant Kogan (ASX: KGN) in a deal worth $1.5 million.
The buy-out comes after more than 30 parties expressed interest in bailing out the company following the appointment of KordaMentha administrators Richard Tucker and Michael Korda on 14 December.
The acquisition – which will be funded from cash reserves - includes intellectual property, goodwill and stock, but excludes all leases and other liabilities. Kogan will also provide logistics support for thousands of customers with undelivered orders.
The Melbourne-based retailer will join Kogan’s portfolio of brands, including Mighty Ape, Matt Blatt and Dick Smith – an electronics company purchased six years ago following the closure of 360-plus stores across Australia and New Zealand.
“The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers,” Kogan COO and CFO David Shafer said.
“We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly.
“Following years of investment in brand-building and marketing, Brosa is a well-known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.”
Founded in 2014 by David Wei and Ivan Lim, Brosa – which means ‘smile’ in Icelandic – fell into voluntary administration after sales dropped after COVID-19 restrictions were relaxed.
The company aims to provide luxury furniture without the mark-ups normally associated with the costs of wholesaling and importing, and also allows designers to manufacture and sell homeware directly to consumers.
Boasting 500,000 subscribers, Brosa generated $75 million in revenue for FY22, the majority of which was generated online.
According to Kogan, the company had invested tens of millions of dollars in marketing and brand-building, and was recently valued at more than $60 million.
“The sale of Brosa is a fantastic outcome for the creditors of Brosa,” Tucker said.
“Kogan.com is a white knight for the business and particularly customers who are awaiting delivery of orders where the stock was held by Brosa. Unfortunately, the administrators were unable to fulfil these orders due to challenges in the logistics network.
“Kogan.com is providing a great outcome for customers to get their product where possible and subject to commercial arrangements.”
Seven years ago, Brosa secured $2 million from AirTree Ventures, which subsequently backed a $5 million Series B funding round that was also led by Bailador Technology Investments (ASX: BTI) and BMY Group in 2017.
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