Bremworth announces second strategic review in two years

Monday, 17 February 2025

Wool carpet and rug maker Bremworth has announced a strategic review a week before it publishes its first-half financials, and the outcome could recommend the company be sold.

It’s the second strategic review in two years for Bremworth, which was hit hard by Cyclone Gabrielle in 2023. The cyclone flooded its Napier factory, and the company only delivered a profit last year because of flood-related insurance payments.

Earlier this month, Bremworth completed its final settlement with its insurer, with the final $42.2 million of the full $104.2m settlement expected to be paid by the end of February.

The review was prompted by the finalisation of the settlement, said chief executive Greg Smith, as well as informal approaches from parties interested in buying the carpet-maker.

Smith said the review, to be carried out by investment bankers from Montarne in Auckland, was expected to take several months.

The previous review done in 2023, and reported to the market in 2024, was to help support strategic decision-making relating to Bremworth’s supply chain and distribution, Smith said.

“This review is altogether different because it’s a review of our ownership structure,” he said.

Smith, the former chief executive of high-end outdoor wear brand Icebreaker, would not identify the parties which made the informal approaches, or their intentions for Bremworth’s factories in Napier, Auckland and Whanganui.

But, he said: “We do know if people are interested, they see value in the brand, the product, and the way we operate.”

That way of operating was uncommon, with Bremworth owning the whole operation from buying wool at the farm gate, to spinning, to dying, to manufacturing.

“There are very few companies that buy wool from the farm, spin it into yarn, and tuft it into carpet,” Smith said.

Bremworth’s biggest market for its wool carpets was in New Zealand, but Smith said Australia should be where it sold most because of the size of its population and economy.

The United States also offered growth as it was such an enormous market, but as yet Bremworth only had a small presence there.

“The US is a target market for us,” Smith said.

Wool carpets were more expensive than many synthetic carpets, Smith said, but there was demand globally for natural carpets.