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After working alongside Universal Store (ASX: UNI) for nine years, the founders behind Byron Bay-based apparel brand THRILLS have sold their label to the retail giant in a $50 million cash-and-scrip deal.
The sale comes seven months after THRILLS founders Tabitha McGregor, Brooke McGregor and Ryan Collins expanded the brand into the US, adding to an existing global footprint in Tokyo, Japan.
Universal Store CEO and managing director Alice Barbery said THRILLS, also known as Cheap THRILLS Cycles (CTC), is currently the highest-selling third-party brand in the Universal Store business and has been a consistent and growing part of the product offering for more than eight years.
In an announcement made today, UNI confirmed the trio would continue to operate the vintage-inspired fashion brand in leadership roles.
“I am delighted to cement our partnership with the three founders of THRILLS. In THRILLS, Brooke, Tabitha and Ryan have built an iconic youth fashion brand and have a proven capability to deliver products our customers love," Barbery said.
"We are excited by the opportunities a closer partnership can deliver in both product and brand development as well as further expansion of THRILLS direct-to-consumer channel."
Founded in 2011, THRILLS initially began as a vintage motorcycle company - importing bikes from the US and Japan to Byron Bay, where such vehicles are not readily available. The company developed a small t-shirt collection to complement the first shipment of bikes and grew its garment range as it took off in popularity around Byron Bay and surrounding areas.
In 2014, THRILLS opened its first flagship store, offering the youth a range of vintage-inspired fashion apparel. Since then, the label has opened a total of eight stores, with a further two slated to open by the end of November 2022.
Under the agreement with UNI, THRILLS will receive $17.5 million in cash, $17.5 million in UNI shares and a notional amount of $15 million in deferred variable consideration (DVC).
In FY22, the brand generated $36.4 million in sales and an underlying EBIT of $7.3 million. The majority of sales were made via the brand’s wholesale channel (79 per cent), followed by online (12 per cent) and retail (9 per cent).
Sales to Universal Store represent approximately 26 per cent of Cheap THRILLS Cycles' (CTC) business, while the sale of CTC’s products represents 9 per cent of Universal Store FY22 sales.
“CTC will continue to operate as a standalone business and will maintain its focus on delivering outstanding service to its customers and retail partners. These retail partnerships are expected to facilitate further range expansion and continued refinement in the product development process,” Universal Store said.
“CTC’s emerging brands present an exciting incremental opportunity for further growth for Universal Store.”
The transaction is expected to complete in Q4 2022 subject to the satisfaction of conditions.
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