Well known big-box retailer Freedom Furniture is up for sale after a turnaround of the chain that has seen it grow into a $400 million business nationwide.

The AFR reported this week that Freedom’s owner Greenlit Brands will look to sell the business, with potential bidders including private equity players Allegro Funds and Anchorage Capital.

It comes after a change in fortune for the business during the COVID-19 pandemic, when a turnaround plan led by CEO Blaine Callard put the retailer on a more stable financial footing.

Freedom Furniture has 47 stores across Australia and 12 in New Zealand.

Freedom benefited greatly from a huge surge in demand for homewares and furniture during the pandemic under Callard’s stewardship, said Retail Doctor Group chief executive Brian Walker.

“Freedom has really improved the sharpness of its retailing standards,” Walker said.

“In the COVID period we saw a cocooning effect where there was record growth in homeware sales.”

But demand for large household purchases has decreased amid wider cost-of-living pressures on consumers, underscoring why Greenlit may want to sell the Freedom business.

Potential bidders

Potential bidders for Freedom are already major players in Australia’s retail landscape as some of the nation’s largest private equity funds.

Anchorage Capital Partners bought David Jones last year, while Allegro Funds bought Harris Scarfe and Best and Less in 2019.

These private equity firms purchase companies and then seek to increase their value in a bid to generate a capital return, either through later selling the company or operating it at a profit.

Plans for Freedom?

No buyers have come forward to make public offers for Freedom yet, so it’s impossible to say what a new owner for the business, if there is one, might do with the chain.

Walker said Freedom has a firm place in Australian furniture retailing, because of its appeal to middle market families with more affordable goods than Nick Scali, but with a higher quality than Fantastic Furniture.

But more recent entrants like online-only Temple & Webster have come onto the scene, showing an e-commerce dominated model for big-box products can work in Australia.

A new owner might look to bolster its online offering to compete for e-commerce demand.

What it means for consumers

Walker said a new owner would likely double down on the strategy that has helped the business turnaround in recent years, which has included investments in online sales.

“I think it will continue on the course – most consumers won’t notice,” Walker said.

In other words, it’s unlikely a sale would have any foreseeable impact on consumers.