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Accent Group (ASX: AX1) has entered into an agreement to acquire Australian youth apparel retailer Glue Store and the wholesale and distribution brands business of Next Athleisure (NAL) for $13 million.
The deal means Glue's retail business, which comprises a network of 21 stores and an integrated online site, will join Accent's portfolio of retail brands including Dr Martens, Hype DC, Merrell, Platypus, SUBTYPE, The Athletes Foot, Vans and more.
As part of the acquisition, Accent will acquire all of NAL's exclusive owned vertical brands including Nude Lucy, Beyond Her, Lulu & Rose and Article One, which drive more than 25 per cent of Glue's total sales.
NAL also has distribution rights to a strong portfolio of popular youth fashion brands like Superga, Ellesse, le coq sportif, Kappa, K-Way, and Napapijri. The sale agreement contemplates the transfer of these distribution rights to Accent, subject in each case to usual brand owner consent.
Post-acquisition, NAL will become a new division within Accent called 'Accent Lifestyle', and AX1 will appoint the current CEO of NAL Darren Todd as the general manager of the new business.
"The NAL acquisition is perfectly aligned to our strategy to grow our leadership position in the lifestyle and youth apparel market in Australia and New Zealand," says Accent Group CEO Daniel Agostinelli.
"Glue Store, along with the NAL wholesale and distribution business, provides an established and complimentary platform to accelerate our growing apparel business.
"We see significant opportunity to leverage Accent's retail expertise to improve the Glue Store customer experience and store profitability. The youth apparel market is highly fragmented with significant opportunity to grow the store network and capture market share over time."
Once complete, Accent intends on growing the Glue business over time and accelerating its online and virtual offerings. AX1 will also lean into its footwear specialty and increase the range of shoes in Glue Stores.
"The move to Accent ownership represents a strong strategic alignment for the Next Athleisure business and the right next phase in the Next Athleisure growth plan that the team has been driving over the last two years," says NAL CEO Darren Todd.
The purchase is expected to complete by the end of May and Accent will use cash from its existing facilities to acquire the two entities.
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