Fantastic Furniture pitches turnaround, online growth for IPO

Fantastic Furniture chief executive Kieron Ritchard has one job when he makes his maiden pitch to fund managers this week, ahead of a potential sharemarket listing.

Ritchard will be out to prove that his furniture retailer is a significantly different beast to the unloved and under-covered small cap that Steinhoff Asia Pacific snatched from the ASX boards in December 2016.

Fund managers have been told to expect a transformation story; one that has seen Fantastic - which investors remember as a bricks and mortar cheap lounge and dining room furniture business with $500 million a year in sales and $30 million EBITDA - turn into an omni channel retailer.

Over the past four years, while fundies were not watching, the company's online sales grew to 28 per cent of total sales, and it wants to emulate click and collect pin up Williams-Sonoma in the United States and hit 50 per cent.

Yes, Fantastic still has a big bricks and mortar store portfolio - 81 stores, 96,000 square metres of showrooms - but the big growth is online. And this bricks and mortar network can help grow the online sales via click and collect.

The turnaround pitch, made with help from Credit Suisse and Macquarie Capital, includes moving up the value chain, from the cheap "Plastic Fantastic" of yesteryear to the first rung of high quality products at a value price point.

It remains to be seen whether investors take the bait. They'll take numbers to be convinced.

As for numbers, Ritchard and chief financial officer Carmen Elliott (ex-Woolworths) are expected to point out that sales has grown 12 per cent a year over the past six years to sit at about $600 million.

The non-deal roadshow meetings begin on Monday. They come as Greenlit Brands - the rebadged Steinhoff Asia Pacific - readies Fantastic for a listing in the fourth quarter of this year, subject to market conditions.