Temple&Webster paid $20 million for Milan Direct in late 2015 and Mr Coulter is optimistic the sales pain will shortlived given that the entire Milan Direct collection will be sold through the Temple&Webster site.
"This plan focuses on building Temple&Webster into a dominant brand in the furniture and homewares category online and the first place Australians turn to in when shopping for their homes,"Mr Coulter said.
"Moving Milan Direct's private label range and product sourcing and private label capabilities to sit under the Temple&Webster platform is the natural next step for the group.
"We anticipate that most of Milan Direct's revenues will transition to the Temple&Webster platform given that we will be migrating the entire Milan Direct private label range to the site,"Mr Coulter said.
Temple&Webster said the merger of the Australian arm of the US business Wayfair,which it paid $6 million to acquire last year and rebranded ZIZO,had been a"tremendous success"and its flagship site was trading up compared with the combined result of the two separate sites year on year.
Temple&Webster's losses were running at as much as $800,000 a month in Octoberbut Mr Coulter said the monthly burn rate was falling month on month and the business was still committed to hitting break-even in calendar 2018 as set out in the float prospectus.
Temple&Webster's share price has plunged from 85¢ a year ago to just 13¢ after it reported a statutory full year loss of $44 million,more than double the forecast $18.5 million from its float prospectus.