Infant-formula business Bubs Australia, currently facing an executive power struggle, has engaged Melbourne-based dealmaking company Kidder Williams to provide strategic advice for its future direction, according to reports by The Australian Financial Review.
The strategic review, already announced by Bubs Australia, may involve guidance on the company’s China operations, which have experienced a significant decline in revenue. In a recent trading update, Bubs Australia revealed that its Chinese revenue for infant-formula and adult nutrition has fallen well below expectations, with a 56% year-on-year decrease for the three-month period ending on 31 March.
Bubs Australia’s partnership with Willis Trading for the distribution of Bubs goat formula, organic grass feed formula, and Caprilac adult goat nutrition is set to conclude at the end of this month. As the company seeks to strengthen its position in the market, a positive outcome from the strategic review is expected to help boost its share price, which currently stands at AUD0.19 ($0.14) compared to a 52-week high of AUD0.68 on the Australian Securities Exchange (ASX).
In addition to the internal challenges, Bubs Australia is also undergoing a power struggle within the board. Founder and former CEO Kristy Carr was dismissed in May, following the departure of Chairman Dennis Lin. The board cited Carr’s failure to comply with board directions as the reason for her removal. A group of shareholders, including Carr and Lin, is now requesting an annual general meeting to oust non-executive directors Katrina Rathie, Steven Lin, Paul Jensen, and Reg Weine and replace them with James Jackson, Peter Nathan, and Rupert Soar.
In a positive development, Bubs Australia announced that its US business is gaining momentum, achieving its first $1 million month on the Amazon e-commerce platform in May. To further strengthen its US operations, the company has appointed Chris Lotsaris, a former executive from Mars, Danone, and Lactalis, as the general manager.
Bubs Australia, which entered the US market last year after a health scare-induced product shortage, is on track to meet all regulatory milestones for permanent access to the US market.
Confirmation of Kidder Williams’ appointment as the advisory company has been sought from Bubs Australia and Kidder Williams directly.
