(Filed Under Financial and General Interest News). Naked Brand Group sales rose and it’s losses shrank dramatically in the three months ended April 30, 2018. A big part of the sales increase was due to a consignment agreement with its new merger partner.
Naked lost $102,547 on sales of $826,984 in its first fiscal quarter, compared to a loss of $3.2 million on sales of $455,160 in the three months ended April 30, 2017. It admitted that the increase in sales was “largely due to $312,597 in sales recorded for the first quarter relating to the consignment agreement with Bendon.” As previously reported, Naked shareholders voted June 11th to go ahead with a merger with New Zealand-based intimates maker Bendon, a deal that has been in the works for over a year.
Describing the quarter, Naked explained that “Increases in sales to department stores and specialty store accounts were partially offset by a decrease in sales to off-price accounts and our e-commerce store.” The company listed a few of its customers in the release: “Nordstrom Dropship, Dillard’s, Bloomingdale’s, Amazon.com, Chico’s, SaksFifthAvenue.com.”
The firm also provided considerable detail about its business “Sales to department stores were approximately $297,000, or 35.9% of total net sales, as compared to $115,600 or 25.4% during the quarter ended April 30, 2017. The reason for the increase in department store sales is as a result of (i) increased sales to Dillards and Nordstrom Dropship, and (ii) sales to Burlington which did not occur during the same period in 2017. This was partially offset by no sales incurred to Saks Fifth Avenue during the first quarter of fiscal 2019.”
“Net sales through our ecommerce store (www.wearnaked.com),” the company continued, “were approximately $76,000 for the fiscal quarter ended April 30, 2018 compared to $80,300 during the fiscal quarter ended April 30, 2017, a decrease of 5.6%. Sales through our ecommerce store accounted for approximately 9.2% of total net sales in fiscal 2019 as compared to 17.6% of total net sales in fiscal 2018. The decrease in ecommerce sales as a percentage of total net sales is attributable to proportionately larger increases in sales to other channels.”
Naked’s $71,400 in sales through third party ecommerce sites were about the same as last year, while “sales to retail and specialty store accounts constituted approximately $356,500, or 43.0% of total net sales for the fiscal quarter ended April 30, 2018, as compared to $93,800, or 20.6% of total net sales for the fiscal quarter ended April 30, 2017.” As noted earlier, $312,597 of those sales in the latest quarter involved the consignment agreement with Bendon. “This inventory is being sold through Bendon retailers internationally.”
“During the three-month period ended April 30, 2018, we sold approximately $25,700 in out of season and overstock inventory through off price sales channels, compared to $91,500 in the three-month period ended April 30, 2017.” Naked added, “Sales to off price channels have since decreased due to the consignment agreement with Bendon,” and the company expects “the decrease in sales through off price channels to continue.”
“During the three-month period ended April 30, 2018, men’s products constituted 35.4% of total sales and women’s products constituted 64.6% of total sales. Going forward, we expect the majority of our growth to be driven by our women’s collections, as we anticipate that our women’s products will become more widely distributed.”
Naked said its gross margin was “29.7%, compared to 22.2% in the comparative period in fiscal 2018.” — NM
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