Nick Scali has cautioned investors that first-half revenue across Australia and New Zealand will drop by approximately 11 per cent to 14 per cent compared to the prior corresponding period. The ASX-listed furniture retailer recorded a 15 per cent decline in first-quarter sales orders following a mid-August cyberattack and persistent weakness across its core consumer markets. That contraction contrasts with the first quarter of fiscal 2026, when sales climbed 11 per cent.
The mid-August intrusion triggered “uncertainty and delays” for shoppers, the company stated at the time. Nick Scali alerted the Australian Cyber Security Centre and the Australian Federal Police, which subsequently investigated the security incident.
By contrast, the company reported stronger momentum in the UK, where it entered the market through the acquisition of Fabb Furniture in 2024. Ongoing capital expenditure into renovating and expanding British stores helped lift written orders by 29 per cent year-on-year in the first quarter.
The Cost of Three Weeks Offline
The operational disruption began in mid-August when unauthorised parties breached internal systems and accessed customer names, addresses, emails and phone numbers. Nick Scali informed the Australian Cyber Security Centre and the Australian Federal Police to investigate the intrusion.
Enterprise resource planning systems stayed offline for roughly three weeks. Store staff continued writing business manually while technicians contained the incident.
Cleaning up the breach generated a $980,000 bill for legal advisers and forensic consultants. Management will classify those advisory expenses as non-underlying items rather than counting them against operating earnings.
Contrasting Fortunes in Britain
Nick Scali is finding better traction in the United Kingdom, where it acquired Fabb Furniture in 2024 to seed an offshore division. Written orders in the British network jumped 29 per cent year-on-year during the first quarter.
Like-for-like sales across the UK estate grew 14 per cent. Temporary closures during store refurbishments accounted for the gap between total orders and comparable trade.
Management plans to launch one new British showroom in late December as it refits existing Fabb sites under the core retail brand. The retailer continues to invest capital to convert British floorspace while protecting group gross margins and cutting administrative overhead.
Diverging Paths for Bulky Goods Operators
Big-ticket homeware merchants face a difficult climate as households cut discretionary outlays and housing market turnover moderates. Australian domestic demand has cooled under high interest rates, hitting furniture chains harder than nondiscretionary retailers.
Retail landlords housing large-format showrooms also face reduced turnover rents and tougher renewal discussions.
The contrast between Britain and the domestic market exposes the split in modern retail turnarounds. British consumers are taking to newly upgraded store concepts even in a flat economy, while Australian shoppers are staying away from domestic showrooms despite decades of brand loyalty.
Shifting Consumer Spending Patterns
The current slump follows an extended boom when post-lockdown home renovations drove furniture sales across Australia and New Zealand. That surge eventually ebbed into an Australian retail recession across 2023 and 2024 before stabilizing.
Economic forecasts published in September projected national retail turnover growth to ease from 2.8 per cent in fiscal 2026 to 1.5 per cent in fiscal 2027. While that deceleration remains milder than the downturn seen two years ago, big-ticket home goods retailers face the steepest drop.
Nick Scali operates 132 stores worldwide across its three geographic territories. Despite the order decline in Australasia, the retailer will open two new stores in Australia and New Zealand in late December alongside its British debut.
