Steinhoff International’s Australasian subsidy Greenlit Brands has sold its general merchandise division, including the Best & less, Harris Scarfe, Debenhams and Postie retail chains, to Allegro Funds, a private equity firm that specialises in company turnarounds.
The move will allow Greenlit Brands to focus on its remaining household goods businesses in Australia and New Zealand, including Fantastic Furniture, Freedom, Snooze, Plush, OMF, Unitrans and FutureSleep, in line with its parent company’s strategy to simplify its portfolio following a $9.2 billion accounting scandal in 2018.
“The sale of Greenlit Brands general merchandise division is a further step in Steinhoff’s programme of planned divestments, as we continue with our announced strategy of simplifying the Group’s portfolio and deleveraging our balance sheet,” Louis du Preez, Steinhoff Group’s CEO, said in a statement.
“We wish Allegro and the general merchandise management team every success with their future plans.”
Greenlit Brands, which rebranded from Steinhoff Asia Pacific last September in an effort to distance itself from the scandal, did not disclose the commercial terms of the transaction, which will include 322 stores and over 6100 employees.
The move leaves the retail company with 319 stores and more than 3000 employees across Australia and New Zealand.
“In a sense, this transaction sees us return to our roots as a focussed household goods group with a ladder of brands with demonstrable integration and as always, striving for our ambition to achieve remarkable retail,” Michael Ford, Greenlit Brands’ executive chair and group CEO, said in a statement.
According to documents lodged with ASIC in January, Greenlit delivered an EBITDA of $101.2 million in the 2018 year ended September 30, a 15 per cent increase from the prior 15-month reporting period.
Total revenue from continuing operations was $2 billion, down from $2.3 billion in the prior 15-month reporting period.
Allegro Funds’ managing director Fay Bou said the private equity firm was looking forward to working with the management teams to transform each of the brands.
“The general merchandise business includes some iconic retail brands that have long-standing loyal customers and passionate staff that have supported the business serving generations of Australians and New Zealanders,” he said.
“We look forward to supporting a highly experienced management team to transform each of the brands.”
The transaction is expected to be completed at the beginning of December. Greenlit Brands will remain a wholly-owned subsidiary of Steinhoff International Holdings.