Naked: ‘$270 Million In Cash And No Debt’

Naked Brand Group has recently moved closer to transforming itself into a “pure-play e-commerce platform,” while at the same time completing “multiple strategic capital financings resulting in cash proceeds of $270 million and the elimination of all previous debt servicing obligations.”

The company announced it “expects to complete the divestiture of its Bendon brick-and-mortar operations in the second calendar quarter of 2021, allowing the company to focus exclusively on the planned rapid acceleration of its e-commerce business.” As of an SEC filing in November, 2020 the company reported it was operating “60 Bendon stores in Australia and New Zealand.”

“Now with over $270 million in cash and no debt we are strategically positioned to pursue accretive acquisitions of high growth and cash flow positive businesses,” declared Justin Davis-Rice, who was recently re-appointed the firm’s CEO (he had most recently been the board executive chairman).“Our strong balance sheet further solidifies the opportunity to be a conduit for industry consolidation as we seek to invest in next generation technology that will enable our customers to access and experience the best brands using world class technology solutions.”

Naked reported the appointment of “Simon Tripp, a seasoned investment banker and M&A executive, to the board of directors in order to assist in building out the e-commerce platform. Mr. Tripp has over 30 years of diversified business, capital markets and investment banking experience, managing both public and private companies across various sectors. Tripp stated “The acquisition environment is rich with opportunity at attractive valuations and we have already begun working with Justin and his team to identify potential opportunities. Naked is focused on innovative technology offerings, including a best-in-class personalized shopping experience utilizing A.I. and other technologies that will uniquely position it as a disruptive player in online intimate apparel.”

After the divestiture of the Bendon segment, Frederick’s of Hollywood will remain as Naked’s key brand (since, in early 2020, for $600,000, it sold “all of its rights, title and interest in the trademarks related to the “Naked” and “NKD” brands to Gogogo SRL,” an Italian firm). However, the actual owner of the Frederick’s brand is Authentic Brand Group., from which Naked only rents a portion of its use. As noted in the SEC filing, Naked is currently “the exclusive licensee of the Frederick’s of Hollywood online license for the U.S., Australia and New Zealand, under which we sell Frederick’s of Hollywood intimates products, sleepwear and loungewear products, swimwear and swimwear accessories products, and costume products. We sell our Frederick’s of Hollywood products online at www.fredericks.com.”

Naked cautioned that while it has entered into a “letter of intent to sell the Bendon brick-and-mortar operations to a group controlled by Justin Davis-Rice” and the former CEO, Anna Johnson, “the parties have not entered into a definitive agreement and, accordingly, Naked cannot provide any assurance that the divestiture will be completed.” If completed it expects “the divestiture of the Bendon brick-and-mortar operations would include the Bendon, Bendon Man, Davenport, Fayreform, Hickory, Lovable and Pleasure State brands.”

In the November filing, Naked noted that several of those brands are currently sold in its Bendon stores, as well as “approximately 325 wholesale stores in Australia, New Zealand and the E.U., and through distributors in the E.U.” —NM