Winnings Appliances has denied it has been sold to Ellerston Capital, rejecting claims that a deal was imminent after reports suggested the private investment firm was poised to acquire the business.

The claim that the business was set to be sold was made by the Australian Financial Review, three journalists at the AFR worked on the story including Sarah Thompson, Kanika Sood and Emma Rapaport.

The speculation comes at a precarious time for the premium appliance retailer, which has suffered a 60% slump in after tax profits and is grappling with rising liabilities, negative working capital and mounting competitive pressure.

The AFR  initially reported that Ellerston — founded by former Kerry Packer investment manager John B. Wylie — was close to buying the entirety of Winning Appliances from the Winning family, with a deal expected to be signed as early as this week.

That claim has now been publicly denied by Winning Appliances management but not John Winnings who is normally the spoksperson for the business.

In an email sent to suppliers, Winning Group chief commercial officer Todd Gibbons said reports of an acquisition were incorrect.

“As part of our normal course of business, we periodically consider strategic capital partnerships that support our long-term growth and strengthen the business,” Gibbons wrote. “If there is ever any important news to share, rest assured you will hear it directly from Herman first.”

Junior and Senior Winnings Jojn Junior left and John Senior Right

The denial leaves unanswered questions about the retailer’s strategic direction as its financial performance deteriorates sharply.

Profit Collapse Despite Revenue Growth

In financial statements filed late last year, Winning Appliances reported an after tax profit of $1.9 million for the year to June 30, 2025 — down from $4.75 million in 2024, a fall of approximately 60%.

The earnings slump came despite revenue rising slightly to $855.5 million. The company also cut its sales and marketing budgets during the period, signalling tightening cost controls as margins came under pressure.

Total liabilities climbed to $267 million, with the largest component — $125.3 million — owed to trade creditors. While borrowings declined, the group’s balance sheet showed growing strain.

As at June 30, 2025, the group’s current liabilities exceeded current assets by $36.7 million. The negative working capital position was largely attributed to $92 million in customer deposits.

Customer deposits represent an obligation to either fulfil orders and collect remaining payments or refund customers if transactions fall through.

Expansion Questions and Competitive Heat

The financial strain follows an aggressive expansion push, including entry into Victoria with a flagship store in Melbourne’s Chadstone shopping centre — a move insiders claim “sucked money”.

Sources say the company at one stage borrowed to fund its expansion in Victoria, while bankers later reduced its borrowing capacity amid concerns over cash burn and growth plans.

Meanwhile, rivals have been strengthening their position. ChannelNews understands that JB Hi-Fi management previously held discussions with the Winning family but opted against an acquisition. Instead, JB Hi-Fi moved to acquire Melbourne-based e&s, with plans to expand the business nationally — setting up a direct competitive clash with Winnings and Harvey Norman Commercial.

A sale to Ellerston, if it had proceeded, would have set the stage for a high-profile contest between major appliance players, including Jerry Harvey’s Harvey Norman Commercial and JB Hi-Fi’s growing e&s chain.

Diversified Focus Raises Eyebrows

Some analysts say speculation about a sale is unsurprising given the Winning family’s increasing focus on ventures outside the core appliance business, including investments in food, restaurants and high-profile yacht racing campaigns such as the Sydney to Hobart.

Suppliers, according to industry sources, would welcome greater stability at the top. Several premium and mass-market appliance brands are said to favour a change in ownership, citing concerns that shareholders have diversified into multiple non-appliance businesses.

The Winning Group’s portfolio includes Andoo, Appliances Online, Heelix, Home Clearance, Rogersellers, Winning Commerciale, Winning Services and Winnings NZ.

History of Valuation Disputes

Questions over valuation are not new.

In 2021, the NSW Supreme Court heard a dispute involving former advisory board chairman David Gordon, who claimed he had entered into a 2017 remuneration agreement that included an option to acquire shares equivalent to 5% of Winning Appliances and related entity Winning Online Group.

Gordon contended the option’s strike price was to be calculated based on the market value of the two companies. The alleged agreement was said to have been made during discussions with John Winning.

Even then, industry observers were questioning the group’s valuation amid periodic talk of a potential sale.

Uncertain Road Ahead

What remains unclear is whether the discussions with Ellerston — which sources confirm did occur — represent a one-off strategic review or part of a broader search for capital or an exit.

It is also notable that the denial was issued by Todd Gibbons rather than John Winning Jr, who has traditionally been the public face of the company.

With profits sharply lower, liabilities rising and competition intensifying, Winnings Appliances faces a pivotal period. While management insists no deal has been struck, the financial pressure and persistent takeover chatter suggest the retailer’s future ownership remains firmly in question.