New Zealand’s best known wool carpet maker is a step closer to leaving the share market after the Commerce Commission cleared its takeover by the owner of rival Godfrey Hirst, although a looming deadline still hangs over the deal.
On 30 June the Commission granted clearance for Floorscape Limited, a wholly owned subsidiary of the United States flooring giant Mohawk Industries, to buy all of the shares in Auckland based Bremworth. Mohawk already owns Godfrey Hirst New Zealand, which for more than fifty years has been Bremworth’s main domestic rival in the wool carpet market.
The two companies competing to sell almost identical products was exactly what worried the regulator when it first looked at the deal. Both are long established local manufacturers, and for years they have gone head to head selling wool carpet to New Zealand homes. On the face of it, letting one buy the other looked like it would remove a genuine competitor from a small market.
In the end the Commission decided the loss of that rivalry was not enough to block the sale. Its reasoning turned on how much the carpet market has changed. Bremworth stopped selling synthetic carpet in 2020 to bet everything on wool, but synthetic products now make up the bulk of what New Zealanders lay on their floors, and most of that synthetic carpet is imported. Commission convenor Dr Derek Johnston said a combined Godfrey Hirst and Bremworth would still be held in check by those importers, and by retailers and shoppers who can switch between wool and synthetic when prices move. On that basis the regulator concluded the takeover was unlikely to substantially lessen competition in the wider soft flooring market.
For Bremworth’s shareholders, clearance is welcome news after a bruising few years. The company traces its listing back to Cavalier Corporation, which floated on the New Zealand exchange in 1984 and bought the Bremworth brand and factories in 1988. It renamed itself Bremworth in 2021 as it pivoted to an all wool story built around natural fibres and sustainability. The marketing was sharp, but the numbers were not. Revenue slid from around $148 million in 2018 to about $80 million in 2024, and the switch away from synthetic carpet did not deliver the sales lift the board had promised while costs stayed stubbornly high.
The company also copped a physical blow. Its Napier yarn spinning plant was wrecked when Cyclone Gabrielle flooded Hawke’s Bay in February 2023, knocking out a core part of its manufacturing. Bremworth eventually reached an insurance settlement worth about $104 million for the damage, but the disruption came on top of already thin earnings and years of cash burn.
The strain boiled over into a full blown shareholder revolt. Frustrated investors, led by a group that included Silver Fern Farms chair Rob Hewett, forced out most of the board, arguing the previous directors had failed to grow the company or return value. That upheaval set the stage for a sale, and Mohawk emerged as the buyer willing to take the loss making manufacturer off the market’s hands.
The deal is structured as a scheme of arrangement, which needs both regulatory clearance and a vote of Bremworth shareholders to succeed. Investors are being offered estimated total consideration of roughly $1.05 to $1.15 a share, a figure that depends on trading conditions and the final shape of the company’s balance sheet. On top of that, Bremworth can hand back surplus cash above an agreed level before the scheme completes, a payment its documents put at somewhere between 30 and 40 cents a share. For long suffering holders who watched the stock sink, an exit near those levels is a tidier outcome than a slow grind on the market.
The catch is timing. The agreement between Bremworth and Floorscape carries a hard stop of 7 August 2026, and if the scheme has not been put into effect by then either side can walk away. Repeated delays in getting regulatory sign off have eaten into the runway, and Bremworth has been seeking to extend that deadline so the paperwork, court steps and shareholder meeting can all be completed in time. Clearance removes the biggest hurdle, but it does not stop the clock.
If it goes through, the sale marks the end of an era for a name that has been on New Zealand floors for generations. Mohawk is the largest flooring company in the world, and folding Bremworth into its Godfrey Hirst operation would leave a single owner sitting across most of the country’s home grown wool carpet production. Supporters of the deal argue that scale is exactly what a small wool manufacturer needs to survive against cheap imports. Critics will note that a proudly local brand, and the last big independent maker of New Zealand wool carpet, is passing into overseas hands.
For the roughly 5,000 wool growers who supply the industry, the change of ownership matters too. Strong wool prices have been weak for years, and a stable, well capitalised buyer for their fibre is arguably better than a manufacturer teetering on the edge. Whether Mohawk keeps pushing Bremworth’s all wool positioning, or quietly folds it back into a broader synthetic heavy range, will say a lot about the future of wool carpet made in this country.
What do you make of the Bremworth sale? Is scale under a global owner the best hope for New Zealand wool carpet, or a loss worth mourning? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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