Bremworth confident Mohawk takeover will be greenlit by ComCom and ACCC

Thursday, 9 October 2025

Bremworth chair Rob Hewett says he’s confident that regulators won’t find competition issues in the company’s proposed sale to the owner of Bremworth’s biggest local competitor, Godfrey Hirst.

US carpetmaker Mohawk Industries’ local arm, Floorscape, is Godfrey Hirst’s owner and is behind the bid for Bremworth. But while Bremworth and Godfrey Hirst were both major competitors in Aotearoa and Australia’s carpet market, Hewett said the broader flooring sector was already highly competitive.

“Carpet is only a relatively small part [of the market] - you’ve also got tiles, concrete, and synthetic carpets as well,” Hewett told The Post. “Although we’re collectively strong in wool, there’s a lot of other competition out there.”

Bremworth signed a scheme implementation agreement with Floorscape last week which could see it acquire 100% of Bremworth if shareholders and regulators – the Commerce Commission and the Australian Competition and Consumer Commission – approved the deal.

Hewett felt the deal would be greenlit.

“We're confident that the Commerce Commission issues can be dealt with, but it has to go through the process,” he said.

“We aren’t concerned about it. If we thought there were significant problems, this deal probably wouldn’t have come to the position it has.”

If the deal was confirmed, Bremworth investors were poised to collect a substantial premium on their shares. Shareholders would receive between $1.05 and $1.15 per share, made up of a 75cps cash payment from Floorscape and another 30cps to 40cps from Bremworth’s own cash reserves.

Regulatory reviews were under way and expected to be completed by the end of the first quarter of 2025, with a shareholder vote likely around March or April.

Keeping manufacturing at home

The board had gone through a range of ownership options before unanimously recommending the transaction. Hewett said the decision would keep wool manufacturing in New Zealand while giving Bremworth access to Mohawk’s global scale.

“Godfrey Hirst or Floorscape, the parent company, wants to keep New Zealand as a centre of excellence for wool manufacture and that’s really the key point for Bremworth.”

Hewett was “very confident” manufacturing would remain in New Zealand under Mohawk’s ownership, though the shape of operations could change.

“They may keep all of the premises that Bremworth have, or they may look to consolidate and expand what they’ve got,” he said. “But all manufacturing, including synthetic carpet manufacturing that Godfrey Hirst already does, is going to stay here.”

Bremworth’s brand was expected to endure, but Godfrey Hirst would make that decision, he said.

A Godfrey Hirst spokesperson said the company was looking to preserve the Bremworth brand but scale operations up to compete globally. The company had not yet decided whether it would change Bremworth’s local operations or consolidate it into the business.

Hewett said, “It’s an iconic New Zealand brand. Bremworth stands for quality wool carpets and has for a very long time. We’re very confident Godfrey Hirst recognises that and will want to keep the brand.”

Diversifying from wool

Although Bremworth has been a strong advocate for natural fibres, it had recently reinstated synthetic carpet production to broaden its retail footprint.

Hewett said any movement into synthetic manufacturing would ultimately support overall group sales by diversifying its product mix, especially for carpet buyers on a budget.

“Synthetic carpet will help sell more wool, because we’re just more relevant with a bigger range,” he said.

“People who can afford wool carpets will buy them, but wool is expensive relative to synthetic,” Hewett said. “When you look at the whole-of-life environmental impact, though, there’s no question that wool is better.”

Hewett, who farms sheep in Otago, said he hoped the sale would ultimately support better returns for New Zealand strong wool producers. Wool farmers’ returns were currently halfway to the optimal farmgate price, he said.

“At the moment, the cost of producing and harvesting wool has been greater than the revenue from it.”

A recent uptick in farmgate prices reflected tight supply and higher demand from overseas manufacturers, but warned that lift might not be sustainable long-term.

“The sustainable farmgate wool price needs to be north of $7 a kilo, my target is $10,” he said.

PGG Wrightson’s auction last month showed South Island wool was at $4.25/kg, up from about $3.50/kg a year ago. That was on the back of tightening global wool supply and Chinese manufacturers stocking up on inventory.

Full-year result

Bremworth also announced its full-year result on Tuesday, revealing a $16 million loss after accounting for insurance costs from Cyclone Gabrielle and other expenses.

Newly minted chief executive Craig Woolford said the 2025 year “proved to be the most testing period in Bremworth’s modern history” thanks to tight consumer spending and more intense flooring sector competition.

Cyclone Gabrielle ate up about $40m of the year’s income while carpet volumes “fell short of expectations” and gross margins dropped to 13% from 24% last year.

Hewett said the cyclone had a significant impact on the business, particularly its Napier plant that “went underwater”.

“It really tested our systems, but we came through it. The team did an amazing job getting us back up and running, and that actually made us stronger as a business,” he said.

“It reminded everyone just how important it is that we manufacture locally and control our own supply chain. That’s been a big part of what’s made Bremworth attractive to a buyer like Mohawk.”