Dulux rides the Bunnings DIY boom

by | Jun 23, 2020

Dulux Group recently reported an impressive jump in overall sales of 19 per cent, in the five months ended May 31, after the paint category delivered robust sales as Australians opened their wallets for DIY projects amid coronavirus restrictions.

Dulux is currently the largest brand stocked by hardware giant Bunnings, with the paint category one of those segments delivering robust sales, according to  a recent Australian Financial Review report.

The sale jump comes after Japanese giant Nippon Paints, bought the Australian company, according to the report.

It seems there is a further shake-up of the Australian paint market expected, with the number three paint player, Wattyl potentially in line for an ownership reshuffle as its American parent, Sherwin-Williams, assesses its options. It is using Deloitte as an adviser to examine whether a sale should be pursued, according to the Australian Financial Review report.

Taubmans sits in the number two position in the market, while the Victorian-based Haymes Paints is at number four, supplying over 300 independent retailers and specialist paint stores.

Bunnings Managing Director, Mike Schneider said there had been robust demand among paint buyers as more people spent extended time at home in the coronavirus pandemic.

“During this period, we have seen strong demand for DIY paints, especially transformation paints, for kitchen benchtops and cupboards,” Mr Schneider said.

There had also been a rush for, ”design and effect paints that can be used for upcycling furniture or on an interior feature like a concrete wall”, he said.

Strong sales for brands such as Porter’s Paint had also been registered at the more premium end of the market.

“Spray paints, for DIY touch up jobs and craft projects, plus interior and exterior paints have also been popular,” he said in the report.

About 40 per cent of Dulux sales are made through the retail channel, the largest being Bunnings. Dulux also owns the Selleys range of handyman products.

Dulux has a strong relationship with Bunnings, which was bolstered by a decision to withdraw its flagship Dulux paint range from rival Masters in mid-2013 when Woolworths was trying to build that business, one that ultimately failed in spectacular fashion, according to the report.

There is speculation that Metcash, which supplies the IGA supermarkets with groceries and also operates the Home Timber & Hardware business, may be a potential buyer of Wattyl this time around.

The Wattyl business is believed to generate about $35 million in earnings before tax, depreciation and amortisation.

Sherwin-Williams acquired the business when it purchased Valspar Corporation for $US11 billion in 2017. Seven years earlier, Valspar bought Wattyl when it was an ASX-listed company.

Haymes Paints has a market share of seven per cent in Australia, while Dulux has around 47 per cent of the market in decorative paints. Taubmans is owned by PPG Industries, based in Pittsburgh, Pennsylvania, according to the Australian Financial Review.