Noni B snaps up five loss making women's retail brands

Noni B Group has agreed to acquire the assets and businesses of Millers, Katies, Crossroads, Autograph and Rivers from the struggling Specialty Fashion Group which will retain the profitable City Chic business which last year earned around $20 million.

Specialty Fashion Group will remain a listed company with City Chic as its major asset.

The five businesses bought by Noni B recorded earnings before interest tax depreciation and amortisation (EBITDA) losses of $6.2 million for the 2017 calendar year.

"The businesses we're acquiring are underperforming for a number of reasons. However we believe our disciplined approach to costs of doing business, combined with our customer focus, will ensure a successful turnaround," says Noni B Group CEO Scott Evans.

"One of the key benefits of this merger is that we will be able to quickly achieve a number of savings and efficiencies that we anticipate will result in the acquired portfolio of assets breaking even on an EBITDA basis in FY19, while we work to improve their overall operating portfolio.

"The scale this acquisition brings will further enhance the opportunity to continue to invest strategically in customer experience, our physical stores and online."

Evans says the acquisitions will make the company one of the largest specialist women's apparel retailers in Australia with more than 3,500 stores across nine brands including Noni B, Rockmans, W.Lane and BeMe with total annual sales predicted of around $1 billion.
 
Noni B Group's acquisition of the five businesses will be funded by an equity capital raising of $40 million which will also raise additional capital to fund transaction and restructuring costs and to provide working capital for the five new businesses.

Business News Australia