Greenlit Brands, the owner-operator of furniture brands such as Fantastic Furniture, Snooze and Freedom Furniture, experienced an operating loss of €40 million, or approximately $66 million, during the six months to 31 March.
The result is more than a thousand per cent down on 2019’s half year result of €3 million profit, despite Fantastic Furniture enjoying like-for-like sales growth during the second quarter – ending the half up 6 per cent.
In total, parent company Steinhoff Holdings saw a comprehensive loss for the period of €2.2 billion, compared to the €450 million in the same period of FY19.
Though online trading across Greenlit was up 30 per cent order system implementation issues and supply chain delays dragged the overall result down, incurring material expenditure which hit the bottom line.
Additionally, a period of four to five weeks spent shuttered across all brands but Fantastic Furniture impacted the result.
“Encouragingly, consumer demand has rebounded strongly in May 2020 and June 2020 with all brands trading and record sales levels being achieved,” the business said in a statement on the South African stock exchange.
“These sales, coupled with the direct and indirect impact of government subsidies, are expected to contribute to a profitable second-half performance for Greenlit.”
The group is also considering spinning off Fantastic Furniture onto the ASX with a public listing, though the process remains “in its early stages and no definitive decision has been taken”.