ASX-listed online retailer Kogan.com has plunged into another distressed asset a week after it was placed under voluntary administration by acquiring failed furniture brand Brosa.

Managers KordaMentha reached a deal with Kogan.com (ASX:KGN) to buy Brosa’s assets for $1.5 million after more than 30 parties expressed interest in the 48 hours since the company was placed in their hands last Wednesday.

KordaMentha’s Richard Tucker said it “a fantastic result for Brosa’s creditors, as well as many customers, with the new owners offering to deliver made furniture to customers who have paid for it.

“Kogan.com is a white knight for the company and especially for customers waiting for orders to be delivered where stock was held by Brosa,” he said.

“Unfortunately, the administrators were unable to fulfill these orders due to problems in the logistics network. Kogan.com offers a great result for customers to get their product whenever possible and subject to commercial arrangements.

Tucker said their priority now is to pay employees as quickly as possible, and so asked Brosa customers must be patient as they complete inventory reconciliation and make arrangements to complete the sale. Customers will be contacted early in the new year and Kogan.com plans to offer delivery for those who have already paid.

It’s not the first time Kogan has swooped in to pick up a failed retailer. After the collapse of the Dick Smith Group in January 2016, just two years after listing on the ASX with a market cap of $520 million, Kogan.com, then a private company, bought the brand and its database from the liquidators for just $2 .6 million.

When imitation designer furniture seller Matt Blatt failed in March 2020, Kogan.com paid $4.4 million for the brand and goodwill, avoiding its liabilities and a trail of angry customers with unfulfilled orders.

Kogan.com’s $1.5 million stake for Brosa follows a similar pattern, with the company assuming intellectual property, goodwill and inventory, but no leases and other commitments, with a commitment to provide logistics support for thousands of non-residents. delivered orders.

The acquisition is financed from Kogan.com’s cash reserves

The brand continues online.

In a statement to the ASX, Kogan.com COO and CFO, David Shafer, said the acquisition will broaden the company’s online furniture offerings.

“We are pleased to be able to provide a lifeline to Brosa customers, save the Brosa brand and relaunch Brosa.com.au very soon,” he said.

“After years of investment in brand building and marketing, Brosa is a well-known online furniture brand in Australia, and we are delighted to bring the brand into the Kogan Group.”

The losers in the deal are Brosa’s venture capital backers, Airtree and ASX-listed Bailador Technology Investments, who have sunk more than $7 million into the company.

Bailador still had a $4.5 million investment in Brosa halfway through the year before recently writing it down to $0.

The Melbourne startup was founded in 2014 by Ivan Lim and Richard Li. It raised $2 million in 2015 from AirTree Ventures, then raised another $5 million in a Series B in 2017, backed by AirTree, BMY Group, and Bailador.

Whether the deal marks a turnaround for Kogan.com’s fortunes in 2023 remains to be seen.

Kogan.com’s stock price is down about 62% this year to $3.27 after starting the year at $8.86.

The company posted a record net loss of $35.5 million after tax in FY 2022, while revenue also fell 8% to $718.5 million. Gross profit decreased 9.3% to $184.4 million.

The company made similar mistakes to last year, when profits fell 87% in FY21 amid explosive inventory levels.

Commenting on the results in August, CEO and co-founder Ruslan Kogan said: “e-commerce did not continue to grow as expected. This led to us holding excess inventory, and an associated increase in variable costs and marketing costs to to sell.”

The 16-year-old retailer vowed to become a leaner company by “keeping inventory the right size” and reducing operating costs.