Mohawk to acquire NZ carpet maker Bremworth
Premium wool carpet maker Bremworth is being sold to the world's largest flooring company.
The company's annual general meeting last week heard that the revamped leadership team of the listed company is now focusing firmly on customers.
New chief executive Craig Woolford told shareholders that to succeed, Bremworth must be cognisant of where the market is.
"Bremworth has a proud heritage in wool carpet, and that remains central to our brand," he says.
But he points out that synthetic carpets account for more than 85% of soft floor coverings sold in Australasia.
"By reinstating solution-dyed nylon alongside wool, we are giving retailers the full range they need and putting ourselves back in the conversation.
"The re-entry into synthetics has been well received. It allows us to participate in more tenders and dealer promotional activities while also positioning our wool carpets as the premium alternative within a comprehensive range.
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"In Australia, our relationships with the major buying groups are strengthening. We are getting back through the door and rebuilding trust, which is critical for long-term volume. Domestically, we are winning back floor space in key independent stores through improved service, reliable delivery and clearer brand communication."
Woolford, who took over as chief executive earlier this year, says that for too long, the business saw itself as just a sales company.
"That mindset needed to change. We are a sales organisation that happend to make carpet, not the other way around.
"Everything we do is to support sales. The team has embraced this shift and the results are showing. We have launched new synthetic ranges alongside our wool offer, giving us fuller product mix that retailers want.
"This has changed the conversation with customers and re-established our relevance in the market."
Bremworth chair Rob Hewett told the meeting that re-entry into SDN carpet is virtually complete.
"We now have stock on hand and expect to see sales begin this month. The demand pipeline is well supported by ongoing yarn supply from our partners."
He says the addition of SDN to Bremworth's product portfolio provides Bremworth with greater relevance to its retail partners.
"Our sustainability principles remain unchanged. Bremworth continues to champion the environmental and health benefits of natural fibres, and we will maintain that leadership position whatever the outcome of the Scheme. We are comfortable as a board that SDN and wool can co-exist under the Bremworth brand. Our customers are asking for this."
Regulatory Approvals Progressing Well
Bremworth chair Rob Hewett says regulatory approvals for the sale of the listed company to Mohawk Industries are progressing well.
The Australian Competition and Consumer Commission has already approved the transaction. Applications are with the New Zealand Commerce Commission and Inland Revenue.
"Subject to these and shareholder approval, the transaction is expected to be implemented in the second half of FY26," says Hewett.
"This proposal provides certainly of value while preserving the Bremworth brand and workforce. It aligns us with a global parent that brings scale, investment capability and access to new markets."
Hewett and a new set of directors took over Bremworth in March this year at the request of shareholders.
He says shareholders asked them to act decisively to stabilise the business and protect value.
"We have done exactly that. We reinstated wool yarn production at Napier. We reintroduced SDN carpet to ensure a relevant product portfolio and that Bremworth remains relevant to the largest segment of the market.
"We continue to right-size the cost base and focus resources where they will deliver the greatest return. We also continued with the strategic review to assess the best way to create long-term value for shareholders. It's been a pretty busy 8 months."
The outcome of that review is the proposed Scheme of Arrangement with Floorscape Limited, a wholly owned subsidiary of Mohawk Industries. Under the Scheme, shareholders are expected to receive total consideration of between $1.05 and $1.15/share. This includes $0.75 per share from Floorscape and an additional $0.30 to $0.40 per share from excess cash to be returned to shareholders.
