South African-owned Freedom Furniture has been acquired by rival, private equity-owned Amart with a view to establishing a 126-store retail giant across Australia and NZ that could list on the ASX some time in 2026.
The combined businesses are expected to continue operating as standalone brands; however, a name change is expected prior to any possible public float.
While no purchase price has been disclosed, it is understood that the combined retail entity will have combined sales of $1 billion, annual earnings exceeding $100 million and 2200 staff.
Amart, which has 66 big box stores across Australia was founded in 1970, while Freedom, which has 60 stores in Australia and NZ - plus six distribution centres - was founded in 1981.
While Amart is best known for its ultra-cheap dining tables and chairs, Freedom sells sofas, as well as furniture for the bedroom, outdoor, office and kitchen, plus soft furnishings such as rugs and cushions.
Freedom CEO Blaine Callard, who was previously credited with turning around Harvey Norman’s retail operation in Ireland, is expected to stay on as CEO, after achieving similar results for the Australian retailer.
Freedom is now on track for $20 million in earnings and sales of $410 million.
Meanwhile, Lee Chadwick who’s been Amart’s CEO for the past decade, will lead the bigger group, which is targeting around $600 million in sales and $90 million in earnings.
It’s understood that the same week Amart’s private equity backer, Quadrant , appointed Macquarie Capital to find a buyer, Freedom’s owners Greenlit Brands instructed investment bank Jarden to pursue a sale following a multi-year turnaround.
While the two brands will remain two distinct propositions, Chadwick told media that the ‘magic is in the backend’.
“We think the growth opportunity is huge,” he said.
“While there was an opportunity for an initial public offering, Quadrant was not rushing for the door.”
Major expansions to both stores could see Freedom and Amart expand to an 80- to 100-store network and a 100-store network respectively.
The final sale of Freedom concludes a number of failed sell-down attempts by Greenlit Brands which is the Australian subsidiary of South Africa’s Steinhoff International.
Having offloaded sofa retailer Plush to Nick Scali in 2021, and Snooze to Queens Lane Capital in 2023, Greenlit's only remaining Australian retail operation is Fantastic Furniture.
“The divestment of Freedom to Amart marks a milestone in the strategic journey,” Greenlit Brands said.
