Buy shares, not furniture: Fantastic pitch to funds

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Fantastic Furniture wants fund managers' money - but doesn't expect them to go shopping at its stores or online anytime soon.

If there's one thing fundies learnt on day one of Fantastic Furniture's non deal roadshow on Monday, it's that the company has a pretty firm view of its target market.

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Fantastic Furniture said its typical customer was female, lives in a house not a unit, and earnt up to $140,000 a year.  Paul Jeffers

It's primarily after two types of customer; those leaving home and those making a family home.

It told fundies its typical customer was female (unfortunately rules out most fundies we know) and earned $81,000 to $140,000 a year (also rules out most fundies, even in a COVID-19 year).

Fantastic Furniture CEO Kieron Ritchard said his customer was also likely to be employed, live in a house (not apartment) in a metro region and likely has a family with kids.

Or another way to think about it is those making nests - aged 20 to 29, skilled/semi-skilled worker, looking for bargains - and home dreamers, aged 30 to 44, white collar workers, living with a partner and/or children.

Funds were told Fantastic Furniture had 3.8 per cent of the Australia's $13 billion a year home furnishings market, and was pitched not far from IKEA in terms of its value proposition and omni channel footprint.

Revenue was $600 million in the 2020 financial year, which was double the amount recorded in 2014. Online sales were worth $170 million in the year to June 30 and had been a big beneficiary of recent lockdowns, even though only one the company's stores had closed (for one day only) during the lockdown.

Interestingly. it said online conversion (the ability to get someone that went on its website to buy an item) was 1.2 per cent, which was about half that of online only furniture retailer Temple & Webster. Growth drivers were listed as expanding its store network, building brand loyalty, growing market share and getting more efficiencies in its vertically integrated operating model.

As fund managers assess Fantastic Furniture as an IPO candidate, it will all come down to price. There was no talk of IPO valuations on Monday, or even any talk of the group's profitability and/or forecasts.

Credit Suisse and Macquarie Capital are working on the float.