Home-grown online retail success story Temple & Webster has snapped up the Australian arm of US furnishings and decor business Wayfair for an undisclosed amount.
The acquisition is part of the multi-million dollar retailer’s ambitious growth strategy as it looks to increase its 1.1 million-strong membership.
Temple & Webster, a previous winner in SmartCompany’s Web Awards, was founded in 2011 and specialises in furniture, homewares and gifts from local and international designers.
Last year the business had 50 full-time employees and turned over $28 million, with plans to reach $50 million by the end of this year.
Chief executive and co-founder of Temple & Webster, Brian Shanahan, says the acquisition of Wayfair’s Australian arm was a “natural next step” in growing the company.
“It’s an exciting opportunity for the progression of both businesses in the Australian furniture and homewares market,” Shanahan says.
“The combination of Temple & Webster’s strong brand identity and unique ability to inspire its loyal member-base… alongside Wayfair’s broad product offering, world-class technology platforms and exceptional speed of delivery, will provide an unparalleled online shopping experience for every Australian.”
Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany Temple & Webster is a classic example of an online retailer that has become successful through a subscription model.
“What’s interesting is we’re seeing a trend of some quite successful online subscription based retailers – Birchbox in the US comes to mind and there are many other examples,” Walker says.
“I think here’s a real appetite for that as it brings the product into consumers’ minds, it motivates them to spend, and becomes a regular part of their lifestyle. With a business like Temple & Webster I think they’ve been very clever and had the right approach in terms of resources and also expertise.”
Walker says acquiring other online retailers is a smart decision by Temple & Webster as it will allow the business to fulfil its ambitious growth targets.
“For them to reach their $50 million dollar growth target… it is more likely to come out of acquisitions,” he says.
“We see pure-play online as really only growth through acquisition – for example, Amazon. If you’re not achieving that then you have a nice little niche business. So you’re either at that niche level or acquiring and growing, and if you think what underpins the pure-play online business it’s a database and to get a databases you grow organically or acquire.”