Temple and Webster is counting on millennials to bail it out if Australia’s housing market continues to head south.
The homewares retailer, which expects to make a first full-year profit this year, says its focus on online sales should help it withstand the softening housing market.
A weak housing market can translate into lower sales for homewares retailers as fewer movers buy new furniture, and those staying put feel less wealthy due to the declining value of their home.
But chief executive Mark Coulter says online sales should be strong as tech-savvy millennials age into the company’s target demographic of 35-to-55 year-olds.
“While the broader furniture and homewares category may be impacted by these market conditions, we remain confident that online penetration of the category will continue as the oldest millennials turn 35 this year,” Mr Coulter told the company’s AGM on Tuesday.
“Millennials have grown up with the internet and already make a significant number of their purchases online in other categories such as fashion and home electronics, and we expect this behaviour to continue for our category, regardless of what happens in the broader housing market.”
Mr Coulter said the size of the opportunity available to Temple and Webster was illustrated by estimates that only four per cent of Australia’s $13 billion furniture and homewares market was online.
That compares to about 14 per cent in the US and UK, he said.
Mr Coulter said year-to-date trade was strong and that Temple and Webster remained confident of recording its first full year of profit.
At 1355 AEDT, its shares were 0.5 cents, or 0.44 per cent, higher at $1.15.