Greenlit Brands, Under Steinhoff International, Reports Near $300 Million Loss
Furniture and bedding giant Greenlit Brands, operating under parent company Steinhoff International, has reported a loss of $288 million after a significant impairment and losses from formerly-owned failed department chain Harris Scarfe.
Documents filed to the corporate regularly last night revealed Greenlit lost a total loss for the year up to 29 September amounted to $287.7 million – a significant increase from the $23,7 million loss for the 2018 financial year.
The near $300 million loss was due to a $154 million write-down of the company’s goodwill, which assessed their brand recognition, and a $125 million loss from its since-divested general merchandise structures, including now-failed Harris Scarfe.
Greenlit is also the parent company for other prominent Australian retailers, such as Snooze, Freedom, Plush and Fantastic.
The company sold its general merchandise division to Allegro, a private equity company, last November.
The company’s revenue from continuing operations, excluding their divested division, amounted to $1.07 billion – a slight increase from $1.03 billion in 2018.
In a report sent to Greenlit’s directors, the company made a statement of its underlying earnings before tax, interest, depreciation and amortisation (EBITDA) on ongoing operations that amounted to $49.6 million for the year – still bringing a drop of nearly 30 per cent from 2018.
But the directors highlighted that the business was still on the lookout for an exit from the South African parent company, Steinhoff International, which gathered negative headlines after a corruption probe early last year.
‘[Greenlit] remains financially and operationally independent from its parent group, Steinhoff lnternational. [Greenlit] continues to carefully and methodically consider various options around separation from its ownership by Steinhoff,’ the directors said according to The Sydney Morning Herald.
Greenlit also said it would look into selling its non-retail investments, including distribution centres and instead invest more into its existing brands to pay down debt.
In a statement released today, executive chairman Michael Ford said the retail environment continued to be a challenge, but said the company was pleased with its EBITDA result.
‘The Australasian retail environment continued to be challenging in FY19. Regardless, the Directors of Greenlit Brands are pleased to report a $49.5 million underlying EBITDA result from the group’s continuing operations, attesting to the strength of our core Household Goods brands and the disciplined strategy that we are executing.
‘Our strategy for 2020 and beyond is to continue to optimise the brand strength, competitive positioning and synergies across our core Household Goods brands and to continue to pay down remaining external debt of circa $50 million,’ Ford said.
Greenlit’s financial reports comes after mass store and operation closures from popular retailers nationwide, including David Jones, Bose, EB Games, Harris Scarfe and German department store, Kaufland.