Australian e-commerce powerhouse Kogan has stepped in to purchase collapsed furniture retailer Brosa for the bargain basement price of $1.5 million, a week after the firm called in the administrators.
In a statement issued Thursday morning, administrators KordaMentha confirmed Kogan was the successful bidder among the 30 parties which expressed interest in the eight-year-old company.
The purchase price includes intellectual property tied to the Brosa name, goodwill, and stock, but excludes all of its leases and liabilities, Kogan said in its own statement.
In addition to the $1.5 million, Kogan will provide funding to ensure the delivery of existing customer orders over the crucial festive period.
KordaMentha’s Richard Tucker said logistical problems meant the administrators were unable to facilitate those deliveries themselves.
“Kogan.com is a white knight for the business and particularly customers who are awaiting delivery of orders where the stock was held by Brosa,” he said.
The administrators will continue to reconcile Brosa’s stock while the sale is completed, with plans to contact customers regarding their outstanding orders in the new year.
Beyond fulfilling those orders, the administrators said their priority is paying employees “as soon as possible,” with KordaMentha thanking staff for assisting in “extremely difficult circumstances.”
Founded in 2014 by David Wei and Ivan Lim, Brosa secured significant funding in its early years: a $2 million investment round led by Airtree Ventures in 2015 was followed up in 2017 with a $5 million raise, powered by Bailador Technology Investments, AirTree Ventures, and BMY Group.
That backing allowed the largely online business to open showrooms in Sydney and Melbourne.
Orders boomed through the early years of the COVID-19 pandemic as locked-down shoppers traded holidays and experiences for new furnishings.
Kogan states Brosa generated revenues of $75 million in FY2022 alone, with the majority of those sales coming through Brosa’s online channel.
The company’s sudden downfall was the result of “short-term cashflow pressures” correlating to the end of lockdowns, Tucker said last week.
Despite the setback, Tucker maintained Brosa had tripled its size over the pandemic, and had developed a technological base capable of becoming “an asset to many other furniture retailers.”
With its new purchase, Kogan will add Brosa to a stable of brands including fellow furniture retailer Matt Blatt, Dick Smith, and New Zealand’s Mighty Ape.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
