Noni B snaps up five loss making women's retail brands
Written on the 14 May 2018 by Ben Hall
Fashion retail group Noni B Limited (ASX: NBL) is banking on a major turnaround in the struggling Australia retail sector after it paid Specialty Fashion Group (ASX: SFH) $31 million for a portfolio of its loss making brands.
Noni B Group has agreed to acquire the assets and businesses of Millers, Katies, Crossroads, Autograph and Rivers from the struggling Specialty Fashion Group which will retain the profitable City Chic business which last year earned around $20 million.
Specialty Fashion Group will remain a listed company with City Chic as its major asset.
The five businesses bought by Noni B recorded earnings before interest tax depreciation and amortisation (EBITDA) losses of $6.2 million for the 2017 calendar year.
"The businesses we're acquiring are underperforming for a number of reasons. However we believe our disciplined approach to costs of doing business, combined with our customer focus, will ensure a successful turnaround," says Noni B Group CEO Scott Evans.
"One of the key benefits of this merger is that we will be able to quickly achieve a number of savings and efficiencies that we anticipate will result in the acquired portfolio of assets breaking even on an EBITDA basis in FY19, while we work to improve their overall operating portfolio."This is another exciting step forward for Noni B Group and represents the acquisition of five well known and established, iconic Australian brands that are both complimentary and highly synergistic to our existing portfolio.
"The scale this acquisition brings will further enhance the opportunity to continue to invest strategically in customer experience, our physical stores and online."
Evans says the acquisitions will make the company one of the largest specialist women's apparel retailers in Australia with more than 3,500 stores across nine brands including Noni B, Rockmans, W.Lane and BeMe with total annual sales predicted of around $1 billion.
Business News Australia
Author: Ben Hall