Thursday, December 7, 2023

Cavalier to cut synthetics, goes all-wool

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Cavalier Corporation has committed itself to all-wool and natural fibres in carpets and rugs to deliver the growing expectations of consumers for sustainable, natural materials.
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Chief executive officer Paul Alston said the company’s manufacturing will transform to all-wool from slightly over half wool use at present.

He estimates that only 15 to 20% of carpet sales in New Zealand are wool and the rest synthetic, a complete turnaround in the ratio from 20 to 30 years ago.

About half the carpets laid in NZ are imported whereas all Cavalier’s production takes place here, he said.

“Over the next nine to 12 months, the company will transition from the manufacture and supply of synthetic fibre carpets, which it believes has negative impacts on people’s health and the planet, with existing synthetic stocks to be sold down,” Alston explained.

“Cavalier has identified a valuable and growing trend from consumers seeking high quality, natural and sustainable products in their homes and believes it is strongly positioned to meet this demand.”

Cavalier will launch a new marketing campaign in September and intends to become a leading designer of wool products.

However, attracting new people into textiles and finding trained employees certainly needed more effort by the whole industry, he said.

Cavalier has its own wool buying arm, Elco Direct, and it also tenders around the industry for its wool needs. 

Alston was one of nine industry members of the Wool Action Group established by Agriculture Minister Damien O’Connor which recently reported on the revitalisation of the strong wool sector.

A return to wool interior textiles will lift the tide of prices and benefit wool growers who have been under-rewarded for years and years, he said.

“When everyone gets behind this return to wool, everyone will benefit, including the environment,” O’Connor said.

Cavalier’s debt and inventory levels are at historical lows and 12 to 24 months of investment have been forecast followed by a return to profitability.

“Funding options are being evaluated and will be put before shareholders,” the stock exchange announcement said.

The company was suggesting that sale and leaseback of properties might be the way to go.

The share price put on 5c after the new strategy announcement, rising to 27c.

It bottomed out at 16c in March after a long slide down from plus-60c two years ago.

The new chairman of Cavalier, George Adams, said the time was right for a transformation.

“To build on our heritage, better meet the changing needs of our customers and reduce our impact on the planet,” Adams said.

“As a result, we are confident we will deliver better returns on investment for our shareholders.

“While this transformation will take investment and time, Cavalier has the infrastructure, capabilities and expertise to effectively manage the change.”

The day before the strategy announcement Adams took over as chairman from Alan Clarke who held the role since November 2017.

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