Shareholder group demands carpet maker Bremworth jettison board

Monday, 3 March 2025

A group of shareholders of NZX-listed Bremworth - including descendants of the original founders of Cavalier Bremworth - are among a group demanding a new board for the carpet-maker citing poor performance over many years.

The group, which includes Suzanne Timpson, daughter of original Cavalier Bremworth co-founder Anthony Timpson, sent a letter to current Bremworth chairman George Adams at the weekend, asking for the meeting to be held promptly following “years of poor operational performance, erratic strategic direction and substandard execution under the stewardship of Bremworth’s current board”.

The latest Bremworth half year result showed a declining cash position, stagnant sales, and increased loss after tax of $8.1 million. It also revealed further deterioration in the company’s revenue, to $80.3m, which has nearly halved from the $148.1m it was in the 2018 financial year.

The company has also just received a final insurance payout of $42m for disrupted operations due to Cyclone Gabrielle, and announced a strategic review of the company, with the possibility of selling it.

In order to decide on what they say is the right next direction, the group of disgruntled shareholders would like to install wool industry stalwart Rob Hewett as chairman of Bremworth, alongside a host of other directors, to try and turn things around. Hewett is co-chairman of Silver Fern Farms Limited, and chairman of Farmlands and New Zealand Woolscours Limited (WoolWorks) among other appointments. He is also a strong wool farmer, and his clip is likely used in Bremworth products.

Hewett told The Post he and the group had spoken to about 35% of shareholders of the company and they were behind what was being proposed. Talks had begun between the parties six to eight weeks ago, after the company’s AGM.

“The shareholders have had a gutsful,” he said. “We all need consumer-led brands telling a great story, but also selling and executing well, day-to-day.”

“If I put my farmer hat on, we need strong wool prices to be strong inside the farm gate, to stop pine trees coming into paddocks. Everything that I do on my farm is about responding to consumers in a way that optimises the opportunity to get premiums - or in other words, giving them what they want.

“Bremworth hasn’t been doing that, you can see it in the numbers. And shareholders have had a gutsful, there’s been 10 years of poor performance, they've watched their investment erode in value for a very long time.”

Hewett did not want to say why none of the documentation outlining the company’s performance had mentioned CEO Greg Smith, who came into the company in mid-2021 and was responsible for bringing a marketing overhaul focused on purely wool carpets targeted at a premium audience.

Hewett said it looked as though the marketing effort had been undertaken well, but he said “we don't know yet. We haven't got our head under the hood.

“Assuming we are successful with [replacing the board] we’re going to review the entire business and, of course, Greg's going to be part of that. Right now I can’t comment on that because I don’t want to presuppose any outcome.”

He also said “the company has been selling the sizzle, but there’s been no sausage”.

Current chairman George Adams has helmed Bremworth’s board since 2018. He said the letter was a “complete bolt from the blue - we’d had no engagement from any shareholder or any parties to this before the meeting”.

He accepted that value in the company had declined over time, but said that process had started in 2014 when the then-Cavalier Bremworth had stopped paying dividends, and the banks handcuffed the business because of its “massive” $90m debt pile. It had taken the company six years to pay off the debt.

Then Covid had hit, making the new “all wool” marketing strategy hard to advance, while Cyclone Gabrielle in 2023 had wiped out its largest manufacturing facility.

Since then the company had negotiated one of the largest, unencumbered insurance payouts in New Zealand corporate history, put a global supply chain in place to make up for the lost of manufacturing facilities and launched a strategic ownership review three weeks ago to find a partner for the business.

“The hard work has been done and now we’re setting about building our revenue again,” he said.

Adams questioned the timing of the approach of the disgruntled shareholders, saying the work of finding a partner or buyer for the business was likely to be destabilised by it, while ultimately, shareholder value would not be served either.

Adams pointed out WoolWorks, which Hewett chairs, and Bremworth have history, and not of the friendly kind. Cavalier (as Bremworth was then known) had a significant holding in New Zealand Wool Services International (now WoolWorks) wool scouring business and assets and was greenlit to buy the whole company back in 2015, creating a monopoly that upset other players in the sector.

Cavalier then sold the wool scouring business to a new owner at a price many shareholders believed to be very low, in order to not breach bank covenants, prior to Adams coming on board. WoolWorks had subsequently expressed interest in buying Bremworth assets.

Adams went on to say Bremworth had no choice but to call the special meeting as requested and ultimately we will put our best foot forward and it is up to the shareholders - we all serve at their behest and if they wish to do something else that is entirely appropriate.“