Temple & Webster sees demand return to core categories

Image of Temple & Webster CEO Mark Coulter
Temple & Webster CEO Mark Coulter
Image of Temple & Webster CEO Mark Coulter
Temple & Webster CEO Mark Coulter

Online furniture retailer Temple & Webster said demand has returned to its core funiture and homeware categories after the early days of the shutdown saw many people buying items to accommodate working and exercising at home.

And the company said it is still enjoying a significant increase in traffic, with record numbers of new and repeat customers in April and revenue for the calendar year to April 24 up 74 per cent compared to the prior corresponding period.

Temple & Webster CEO Mark Coulter said the business is well set up to handle the uptick.

“Being an online-only business, we can scale quickly and are responding to the increased demand by expanding our customer service team,” he said in a statement to the ASX on Tuesday.

“The team has done an amazing job in meeting the needs of our customers during this period, while maintaining the our high levels of satisfaction, all while working from home.”

More than 95 per cent of the Temple & Webster team, both onshore and offshore, have been working from home since the beginning of March due to the global coronavirus pandemic.

The retailer has been working closely with partners, especially its logistics partners, to ensure the health and safety of staff and customers by implementing procedures at the point of delivery to minimise the risk of infection.

“We are committed to maintaining these working arrangements for as long as the government and community needs us to,” Coulter said.

And while the retailer has seen some stock delays out of China, which are now resolved, and is keeping an eye on supply out of India and Malaysia, it said its supply chain overall is in good shape.

“With hundreds of suppliers sourcing from multiple countries, our business has inherent flexibility in its supply chain,” Coulter said.

“We have also seen seen a high degree of substitution between different product lines within categories which gives us comfort we can support increasing demand from our customers during this time.”

The company noted its strong financial position, with approximately $20 million cash on hand, a debt-free balance sheet and capital-light business model, and said it is profitable and cash flow positive.

While it stands to benefit from the increase in online shopping seen so far in Q4, the company remains watchful of the significant uncertainty in the macroeconomic environment and is prioritising shorter-term operational initiatives to drive growth during this period.

“While the current global situation makes it hard to predict what will happen in the short term, we remain bullish about the longer-term shift from offline to online driven by changing customer preferences and demographics,” Coulter said.

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