Having well and truly proven that Australians will buy furniture online, pure play e-retailer Temple & Webster (ASX: TPW) has today announced plans to break down the walls of the DIY market and renovate.
With its new home improvement market offering The Build by Temple & Webster, the Sydney-based company founded in 2011 will now take on established giants in the space like Bunnings and IKEA, which dominate the industry valued at around $26 billion according to IBISWorld.
Like its furniture e-comm platform, The Build is online-only and will sell goods for DIY projects, renovations and home improvement projects.
TPW CEO Mark Coulter says The Build is a natural extension of the company’s current business.
“Our mission is to help our customers live and work in more beautiful spaces, so turning our attention to home improvement is a natural extension,” Coulter says.
“Australia is a country of home renovators, we love our homes, and we love making them more beautiful.
“The Build by Temple & Webster is aimed at making home improvement jobs, big or small, easier, cheaper, and better.”
The site has launched today with an initial range of more than 20,000 products across 39 categories including bathroom fixtures, kitchen fixtures, lighting fixtures, ceilings fans, blinds, curtains and wallpaper.
In the coming months, TPW plans on adding more categories including flooring and tiling, outdoor living and landscaping, tools and building/renovation equipment. TPW has made an initial $10 million investment for the launch of the site, contributing to marketing, staff and working capital costs.
The company described the market opportunity addressed by The Build as “significant”, with TPW expecting the home improvement site will double the group’s total addressable market to $32 billion. Further, the retailer hopes The Build will make a “material contribution” and be EBITDA positive by FY26.
TPW also notes the category is “significantly underpenetrated” with respect to online adoption in Australia, with only 4 per cent migrated online.
“Natural synergies and cross sell opportunities between The Build and the core Temple & Webster business will help to scale The Build and will ensure the Group captures a larger share of customer spend on the home,” TPW said.
“These include leveraging the core technology platform, digital marketing and data expertise, and sharing functions such as logistics and supply chain management.”
The announcement comes alongside a trading update from the pure-play retailer, which reported year on year revenue growth of 23 per cent for the period 1 January to 30 April.
“As previously stated, our diversified supply chain, including both private label and drop ship, continues to hold up well and underpin growth, and we are in a strong stock position for Q4FY22,” TPW said.
“We continue to invest into areas that are building key strategic moats around the business (data, personalisation, AR/AI, logistics) and we will continue to use our strong balance sheet position to further grow organic opportunities, such as our private label offering, whilst leaving room for opportunistic inorganic activity.”
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