Bendon Reveals Huge Losses As It Merges

As Naked Brand Group and Bendon Limited announced the consummation of their merger, Bendon itself revealed huge losses in its past two fiscal years, about $25.7 million and $27.4 million respectively, at current exchange rates.

Naked Brand Group Limited (NBGL), the resulting entity of the combination, also announced a private placement sale of $17 million of its ordinary shares, which occurred as the merger was completed. It added that each of these new investors “received a five-year warrant to purchase the same number of ordinary shares of [NBGL] for which such investor subscribed. Accordingly, [NBGL] issued warrants to purchase an aggregate of 4,534,137 ordinary shares to the investors. The warrants have an exercise price of $3.75 per share and have certain “cashless” exercise features.”

The CEO of the new company is Justin Davis-Rice, and Carole Hochman, formerly Naked’s CEO, is the executive chairman. The firm began trading on the Nasdaq Capital Market, under the same symbol as formerly used for the Naked common stock, “NAKD,” on June 20th.

Declared Davis-Rice, “We believe this merger will enable the combined company to strengthen its global industry leadership and continue to drive growth over the long-term. Through the use of the U.S. capital markets, we anticipate having financial flexibility to expand distribution networks and further develop our businesses as well as acquire complementary brands. We are excited to further revolutionize the lingerie industry through our unwavering commitment to best in category innovation in design and technology within product and brand development.”

As details of the merger released, Bendon made public additional information on its financial condition. Bendon revealed a loss of $37,445,000 New Zealand dollars (NZD) (about $25.7 million) on sales of $131,388,000 NZD (about $90.0 million) in the twelve months ended January 31, 2018 compared to a loss of $39,968,000 NZD (about $27.4 million) on sales of 152,144,000 NZD (about $104.3 million) the year before.

Naked itself has sustained years of losses and as of January 31 of this year had an accumulated deficit of $63.0 million. — NM