Online furniture and homewares retailer Temple & Webster will merge Milan Direct into its e-Commerce platform as part of its strategy to cut costs and ramp up sales and profitability come 2018.
Milan Direct’s Melbourne head office will close and be moved to Sydney to unite with parent company Temple & Webster, joined by key staff, including founder Dean Ramler, who sold the company in December 2015 to Temple & Webster for $20 million in cash.
The Group’s chief executive Mark Coulter told the AFR that the integration will reduce duplication and costs, as well as fast-track Temple & Webster’s path to profitability.
Coulter, one of the original co-founders of Sydney-based Temple & Webster, was recently appointed as the company’s CEO in October this year, following his involvement as an advisor to the company since its inception in 2011.
Temple & Webster suffered a sizeable $44.4 million loss in the 2015-16 financial year, more than double its forecasted $8.5 million loss. The company is now widely known as one of the worst floats of 2016. Over the past few months the homewares pureplay has cut operating costs by 20 percent, scaled back marketing spend, and closed two warehouses.
Milan Direct’s Melbourne presence was originally born as a pop-up showroom to increase brand awareness and broaden its customer base, as well as allow its csutomers to touch and feel merchandise before they buy and help leverage its relationship with its 1,200 plus suppliers.
The Temple and Webster Group had plans to open a second Temple & Webster store in Sydney next year, however it’s unclear whether this will now go ahead.
The furniture retailer currently competes with multichannel rivals such as Harvey Norman, Fantastic and Freedom. The furniture and homewares market is estimated to be worth $12.6 billion, however only 4 percent of sales have migrated online.