Naked Sells Naked Brand, Exits Heidi Klum

Naked Brand Group has taken dramatic steps to raise cash and reduce expenses in recent weeks, including the surprising sale of the Naked brand name itself.

On January 21 the company announced it was selling, for $600,000, “all of its rights, title and interest in the trademarks related to the “Naked” and “NKD” brands to Gogogo SRL,” an Italian firm.

Ten days later Naked revealed the termination, apparently by mutual agreement, of its license arrangement with Heidi Klum and Heidi Klum Company, LLC. That agreement had been signed on September 24, 2014 and covered the “design, manufacture and sale of Heidi Klum branded intimate apparel and swimwear,” as well as solutions products and men’s underwear. “The initial term of the license agreement had been scheduled to expire in December 2021 and would have been renewable for additional periods of five years at the company’s discretion.”

As part of both agreements, Naked will be selling off branded merchandise for a period of several months going forward.

In mid February the company reported it was raising about $3 million through the sale of shares and warrants to St. George Investments. Naked said it “intends to use approximately $790,000 of the net proceeds from the sale of the note to repay a portion of the loans under the company’s existing senior secured credit facility with the Bank of New Zealand.”

Anna Johnson, Naked’s CEO, asserted “We are pleased to announce the divestiture of Naked brand trademarks as part of our strategic turnaround. While Naked brand products enjoyed modest sales in the United States, the lack of foreign demand has led us to monetize the trademarks and retain the designs as part of our new focus to build Bendon as our master brand globally, leveraging its storied 72-year history.”

It is interesting to note that when Bendon merged with Naked Brand Group a few years ago it chose to use the Naked name for the combined entity.

The Heidi Klum license had once seemed an important part of Naked’s business. In an abrupt move in the fall of 2014, Bendon, as the earlier version of Naked was then known, ended its 25-year association with model and actress Elle Macpherson by replacing it with the licensing agreement with Klum. The company announced at the time, “the entire Elle Macpherson Intimates collection will be re-branded as Heidi Klum Intimates and will launch on 1 January, 2015.” The firm declared that Klum was the new “creative director and face of Bendon’s flagship Intimates collection.” Added then Bendon CEO, Justin Davis-Rice, “As a globally renowned supermodel and successful entrepreneur, we are very excited to welcome Heidi to our flagship intimates collection. As our industry continues to globalize, fresh designs and active publicity are becoming more and more important. Elle has been a great partner to Bendon, however it’s time to take the brand to even greater heights, and Heidi is perfectly positioned to do just that.”

More recently, in the summer of 2018, Davis-Rice had announced “a long-term strategic partnership with CVS Health, which has placed our high-margin Heidi Klum Intimates Solutions line in over 4,000 retail locations across the United States. This move greatly diversifies not only our distribution base, but our product offering as well, providing the Heidi Klum Intimates line representation outside of lingerie, but in a complimentary category. In the first year, we expect significant retail sales from this relationship with a gross margin profile much higher than our traditional product lines.”

With the loss of Heidi Klum and Naked, the company’s brands going forward will include the licensed Frederick’s of Hollywood brand, as well as Bendon, “Bendon Man, Davenport, Fayreform, Hickory, Lovable and Pleasure State. The company sells these brands at 60 Bendon stores in Australia and New Zealand.” — NM