Furniture manufacturer and retailer Fantastic Holdings will book a $9.1 million charge due to the closure of its loss making Le Cornu furniture business in Adelaide, which will lead to job losses.
The one-off charge will severely dent its annual profit, which totalled $13.2 million in its 2014/15 year, and includes a cash charge of approximately $2.5 million.
The Le Cornu business has been profitable for the past few years but Fantastic said trading has deteriorated in 2015/16 and as a result will incur trading losses of about $4 million.
Fantastic operates the Le Cornu brand in Keswick, Adelaide, as well as in Darwin, alongside its larger Fantastic Furniture and Plush brands.
The Keswick site employs 95 permanent employees, of which around 25 will be redeployed within the company.
Fantastic said there will be an unspecified number of staff redundancies.
The Le Cornu brand will continue to trade in Darwin, with minimal impact from the Adelaide closure.
"Fantastic Holdings is committed to its strategy of investing in strong furniture brands and we believe that winding down the Le Cornu brand in Adelaide and investing further in our core brands in South Australia is the right strategic choice," group chief executive retail Debra Singh said.
Fantastic expects its earnings before interest and tax in the 2015/16 year, before the newly announced charges, to be about 30 per cent above the prior year's $26.1 million.
Fantastic shares dropped 12 cents, or 5.4 per cent, to $2.12.
