Discourse from the Bourse: ADH, NAB

Fabric and homewares retailer Adairs (ASX: ADH) has surprised with an $80 million plunge into the furniture market.

Adairs announced Thursday that it was buying local furniture retailer Focus on Furniture (FoF).

The purchase will be paid for by debt and the placing of $6 million Adairs shares with the principal of FoF, Rob Santalucia.

Focus reported $150 million in revenue for the past financial year and $32.8 million in earnings before interest and tax (EBIT) with 23 stores across Australia.

The purchase will see Adairs move into a completely different sector where it will butt sofas with the likes of Harvey Norman, Nick Scali and the online operator, Temple & Webster.

Adairs says it will grow its new store network and its online channel, with the business continuing to operate separately to Adairs under the leadership of major CEO Rob Santalucia.

It’s the second acquisition by the business in the furniture space in recent years, with the company paying $85 million in late 2019 to buy New Zealand online furniture seller Mocka.

“Focus builds out our product offering in the key area of home furniture and increases the exposure we have to that market by almost three times,” chief executive Mark Ronan said.

“The Adairs Group now comprises a highly profitable and aligned portfolio of brands with significant growth potential targeting the middle market in the Home category in Australia and New Zealand.”

Adairs shares ended up 4.1% at $3.56 after touching a day’s high of $3.82.


The ACCC has greenlit National Australia Bank’s (ASX: NAB) acquisition of Citi’s Australian consumer banking businesses, after a review found the deal would not substantially weaken competition in the banking sector, especially credit cards.

The ACCC has been examining NAB’s proposed $1.2 billion offer to buy Citi’s retail banking arm since it was revealed in August for at least $1.2 billion.

The purchase will expand NAB’s housing mortgages and deposits and making it the country’s second largest credit card lender – albeit at a time of falling card use.

In a statement on Thursday the Australian Competition and Consumer Commission (ACCC) found that while the two banks overlap in credit cards, personal loans, mortgages and transaction accounts Citi retained a “minimal market share” meaning the deal would not limit competition.

The ACCC’s review focused on competition in the supply of credit cards, as Citi is a substantial provider of credit cards and credit card services. Evidence showed that the proposed acquisition was unlikely to raise competition concerns in any other areas of overlap, given Citi’s minimal market share in these markets.

The review considered whether NAB’s acquisition of Citi would reduce competition both in the overall market for credit cards and in particular segments such as credit cards with rewards programs.

During its review process, the ACCC consulted with a broad range of stakeholders including credit card suppliers, third party distributors of Citi’s white label credit cards (known as white label partners), and consumer groups.

Very few concerns were raised by those stakeholders, the ACCC reported.

The ACCC said it concluded that, following the proposed acquisition, NAB would continue to face competition from a range of suppliers of credit cards.

NAB shares eased 0.4% to $28.32.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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