One of Australia's biggest furniture retailers will shut down its final onshore manufacturing operation as it transitions to an import supply model amid soaring local operating costs.
Friday will mark the end of an era for Fantastic Furniture's lounge manufacturing site at Fairfield East in Sydney's south-west, and for the 100 staff who work there.
It is understood manufacturing will be relocated to China and Vietnam as part of the retailer's bid to remain financially sustainable.
The Fairfield East site manufactured one-quarter of the retailer's lounge range and about 6 per cent of its total stock.
A spokesman confirmed local production will conclude on Friday.
'Moving to a global supply model supports the long-term commercial sustainability of our business and gives us the flexibility to continue investing in new, fresh product ranges for Australian customers,' he told The Australian.
'Our immediate focus is our people. We recognise the outstanding contribution our manufacturing team has made over many years and remain committed to supporting them through this transition, including retraining and redeployment opportunities, our employee assistance program, and outplacement services where applicable.'
The Daily Mail contacted Fantastic Furniture for further comment.
Fantastic Furniture will shut down its final local manufacturing facility on Friday
The move will impact 100 jobs at its Fairfield East manufacturing site in Sydney's south-west
The news has renewed calls for fairer import duties and greater support to help Australian manufacturers maintain local production.
Earlier this year, Allegro Funds acquired Fantastic Furniture from Greenlit Brands, formerly known as Steinhoff Asia Pacific, for an undisclosed sum.
The deal completed Greenlit Brands' multi-year divestment program of its Australian retail portfolio, which had previously included Best & Less, Harris Scarfe, Snooze and Freedom Furniture.
'We are really pleased with this outcome for the Fantastic Furniture business and its people, as they are joining a group with a strong track record in building and enhancing retail businesses that are already successful,' Greenlit Brands' non-executive chair, Michael Ford, said at the time.
'We have been careful and methodical throughout this period to identify the right new owners for all our former businesses, so that they can grow to the next stage of their development.'
The latest news comes just days after rival retailer Nick Scali warned of a sharp drop in profits due to challenging market conditions and Australia's housing downturn.
Net profit for the six months to December 31 is estimated to be between $28 million and $32 million, down significantly from $41 million in the same period a year earlier.
Founded in 1989, Fantastic Furniture began as a stall at Sydney's Parklea Markets and opened its first store within two years.
The decision means that all Fantastic Furniture stock will be manufactured offshore
The well-known Aussie retailer was aquired by Allegro Funds earlier this year
In 1996, Peter Brennan, Peter Draper, and Julian Tertini rescued the business out of administration and restructured the brand.
Today, Fantastic Furniture is the largest manufacturer of sofas in the Southern Hemisphere with almost 90 stores across the country.
