Castlery reaps fruits of US gambit in FY 23 as revenue grows 63%

GFR Holdings, the parent of Singapore-based furniture retailer Castlery, posted strong revenue growth for the second year running, according to its most recent set of financials.

In its financial year ending March 2023 (FY 2023), revenue increased 63% to US$180 million compared to FY 2022.

Although this was less than the 202% year-on-year topline growth GFR Holdings saw in FY 2022, the revenue bump is still significant given that it was growing off a larger base, not to mention the fact that the group’s FY 2022 figures reflected a 15-month period between January 2021 and March 2022.

Expenses also grew, but at a slower rate than revenue. This led to the company’s loss before tax narrowing by 71% to US$2.6 million.

Heavy investments pay off

Revenue jumped because of strong momentum in the US, a market which Castlery invested heavily in and is currently its largest.

In the US, revenue more than doubled between FY 2022 and FY 2023. Since 2020, revenue from this market has increased almost 13x.

Castlery’s expansion in the US is part of a larger trend of Singapore-based startups looking to go global.

In the US alone, consumers spend US$16 trillion on goods and services annually.

Declan Ee, Castlery’s co-founder, attributed the firm’s success in the US to its “strong product-market fit.”

He tells Tech in Asia that the company achieved this by offering “quality [products] at a compelling price point” and a “strong digital UX experience” that increases conversion rates. Its fulfillment service, measured by how often goods arrive on time and without damage, is also “best in class,” he says.

Revenue growth in the company’s other markets, however, has stagnated, with Singapore and Australia growing by just 6% and 1%, respectively, in FY 2023.

Ee notes that the company had “a lot of room to grow” in the US, citing a market size of over US$200 billion for the furniture industry, compared to US$10 billion in Australia and US$1 billion in Singapore, where Castlery launched in 2017 and 2013 respectively.

Ee acknowledges that growth in these two markets “will not be as explosive” as that in the US, which the company entered in late 2019.

Despite the fast growth in the US, the market isn’t Castlery’s sole focus, Ee says. The company is still working on improving the customer experience and growing its footprint in all its existing markets, he adds.

As an example, Ee cites Castlery’s opening of a 24,000-square-foot flagship store last March along Orchard Road, Singapore’s premier shopping belt.

9-year runway

No IPO plans