👉 Background: Freedom Furniture was founded in 1981 in Sydney and has spread its stylish, yet affordable furniture empire to 60 stores across Australia and NZ. It has been through more owners than a well-loved vintage armchair after being acquired by private equity company, listing on the ASX, then taken private by Steinhoff International and then spun out into a rebranded company called Greenlit Brands.

👉 What happened: Freedom struggled in the late 2010s but in 2019, it went through an extensive turnaround. The new management positioned Freedom Furniture in the sweet spot - not quite as expensive as Nick Scali but better quality than Fantastic Furniture. Freedom now generates more than $400 million in revenue per annum and $20 billion in EBITDA.

👉 What else: With this positive turnaround, Greenlit Brands is looking to sell Freedom Furniture and is currently shopping around the couches and rugs. The most likely buyer? Private equity firms specialising in retail turnarounds.

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‍What's the key learning?

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‍💡To private equity firms, struggling retailers are just untapped gold mines.

💡Anchorage Capital has specialised in this model in Australia.

• It snapped up David Jones for just $92.5 million - a steal considering Woolworths South Africa paid $2.1 billion for it just 9 years earlier.
• It acquired Dick Smith for $94 million in 2012. And two years later, it listed on the ASX and made $264 million in profit.

💡But since this turnaround, Freedom Furniture is already quite profitable. So, unlike the usual private equity rescue mission, this one might just be about sprucing things.