A surge of interest from potential buyers could bail out embattled online luxury furniture retailer Brosa after the Melbourne-based company went into voluntary administration last week.
Richard Tucker and Michael Korda of KordaMentha have been appointed as voluntary administrators for Brosa, which received more than 30 enquiries to buy out the company.
Founded in 2014 by David Wei and Ivan Lim, Brosa – which means ‘smile’ in Icelandic – fell into voluntary administration after sales dropped in the wake of a relaxing of COVID-19 restrictions.
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.
Tucker noted buyers were particularly interested in Brosa’s online expertise and unique customer base.
“The potential buyers have been given details of Brosa’s operations and they are doing their due diligence. We hope to have a deal in the next week before the first meeting of creditors,” Tucker said.
Seven years ago the company 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.
According to Tucker, Brosa tripled in size during the pandemic but faced challenges when sales declined after the COVID-19 restrictions were lifted.
“This caused short-term cashflow pressures after a period of phenomenal growth,” Tucker explained.
“The business tripled in size during the pandemic, developing a strong customer base and technological capabilities that would be an asset to many other furniture retailers.”
Tucker also called on customers to be patient so the administrators can focus on the plan to ensure Brosa can continue as a business.
“I understand the frustration of customers who are waiting for deliveries. But we must concentrate almost completely on this window of opportunity to save the business and provide a better outcome for customers,” he added.
“We are assessing orders and stock so we can inform customers about their orders as soon as possible.
“The administrators will be in contact with customers by email as soon as this analysis is completed. This however will likely take the administrators some time.”
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