Australian furniture retailer Nick Scali has reported a 15% decline in sales orders and a 10% drop in store traffic across Australia and New Zealand, as challenging trading conditions and the fallout from a recent cyberattack place further pressure on the business.
In a trading update released on 21 October, the company revealed it had incurred approximately $980,000 in costs following an August cyberattack that disrupted its enterprise resource planning (ERP) systems for around three weeks.
The incident forced stores to process customer orders manually while the retailer worked to restore its systems. Despite the disruption, its stores remained operational, although customers experienced delays and slower response times.
The $980,000 in direct costs related to consultants and legal advisers engaged following the incident. These expenses will be reported separately from the company’s underlying financial results.
The cyberattack also raised concerns about customer information, with reports indicating that order details, including customer names, email addresses, delivery addresses and phone numbers, may have been exposed.
Alongside the operational disruption, Nick Scali reported weaker trading conditions across its Australian and New Zealand stores during the first quarter of the 2027 financial year.
Written sales orders declined 15% compared with the same period last year, when the retailer recorded 11% growth, while store traffic fell approximately 10%.
The company expects first-half revenue across Australia and New Zealand to decline between 11% and 14%, with underlying group net profit after tax forecast to reach between $28 million and $32 million.
However, performance in the United Kingdom was more positive, with written sales orders increasing 29% and like-for-like sales orders growing 14% during the quarter.
Despite the challenging conditions in its home markets, Nick Scali is continuing with its store expansion plans, with two new locations scheduled to open across Australia and New Zealand in late December.
The retailer is also progressing its UK expansion, with another store expected to open before the end of the year.
The incident highlights the operational challenges retailers can face when critical business systems become unavailable, particularly those responsible for managing customer orders, inventory and fulfilment.
For retailers operating across multiple locations, maintaining business continuity during technology disruptions remains important to limiting delays and maintaining customer service.
