In late 2019 the owner of fashion retail brands such as Katies, Noni B and Millers turned heads with when it purchased a majority stake in a struggling New Zealand e-commerce operation called EziBuy for just $1.
That deal is now looking like a bargain after Mosaic Brands (ASX: MOZ) today announced it had exercised an option to buy the remaining 49.9 per cent stake in the online fashion retailer for $11 million.
The full purchase is expected to double the group's annual online sales to $218 million - a division that last financial year contributed 19 per cent of revenue ex-EziBuy.
"When we purchased a 50.1 per cent stake in EziBuy late in 2019 for just $1, it’s fair to say the brand was a little unloved and its potential underestimated," says Mosaic Brands CEO and managing director Scott Evans.
"We’ve quietly and consistently worked in the background to turn around the business and in just 18 months delivered an EBITDA of $3.7 million for FY21.
"Sales from Q2 to Q4 in the last financial year were up on the previous corresponding period and EziBuy has started FY22 positively."
The agreement to purchase the remaining stake is subject to obtaining all approvals as are necessary, including any regulatory approvals. Once the purchase is settled, the completion payment of $11 million has been deferred to no later than 30 June 2022.
Mosaic - which also owns Autograph, Crossroads Rivers, Rockmans and W.Lane - recorded an EBITDA of $48 million in FY21, compared to a loss of $45 million in FY20.
"Notwithstanding significant ongoing disruptions to our business throughout the year, including numerous lockdowns and store closures, we are incredibly pleased with the results we have achieved and the return to profitability due to the actions we took to reset the entire group for the future," Evans said in early September.
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