Noni B Jumps Up Australia's Largest Female Retailer

Australian womenswear retailer Noni B announced the acquisition of its mid-market brands under the umbrella of Specialty Fashion: Millers, Katies, Rivers, Crossroads and Autograph for $31 million.

After the acquisition, including the existing brands Noni B, Rockmans, W.Lane, and BeMe, Noni B will become Australia's largest womenswear retailer with nine brands and more than 1,350 stores.

Scott Evans, general manager and CEO of Noni B, said in a Rosewholesale Coupons statement that based on the 2017 performance data, after the completion of the acquisition, the Group’s annual sales will increase to US$1 billion, excluding the synergies, including the benefits from closing stores. EBITDA increased from the current 21 million U.S. dollars to 31 million U.S. dollars. “This is yet another step forward for the Noni B Group. We have acquired five classic Australian brands that are complementary and highly synergistic with our existing product portfolio.”

In 2017, Noni B’s sales increased to US$311 million after acquiring Pretty Girl Fashion Group, which owns Table Eight, Rockmans, BeMe and W. Lane. Scott Evans pointed out that in the past 18 months, the group's team has been integrating the Pretty Girl Fashion Group. “Our team has created a very successful retail structure with potential for expansion. With the acquisition of assets from Specialty Fashion, Noni B will become one of Australia’s outstanding women’s apparel retailers.”

Thanks to lower product costs, the acquisition is expected to bring at least $30 million in synergy for Noni B. Scott Evans expects that the additional costs of the acquisition of the brand will continue to affect the profitability of these brands, so they will continue to lose money in 2018 and are expected to achieve a balance of payments by 2019. He pointed out that the poor performance of the brand “has multiple reasons. We believe that our strict cost control, coupled with a customer-centric strategy, will ensure its smooth return to profitability.”

In November 2017, Specialty Fashion began a strategic review, and then CEO Gary Perlstein, who has served for 14 years, announced his departure — and has yet to find a new successor.

In 2016/2017 fiscal year, Specialty Fashion’s operating loss further expanded to US$8.4 million, of which the total loss of the five brands sold this time was approximately US$6.2 million. The company’s management stated that the proceeds from the sale of these five loss-making brands will be used to adjust the company’s balance of payments and to create a platform that will drive future growth, and also allow the company to regain its full duty-free bonus.

After the transaction, Specialty Fashion still maintains its Shein Coupons current listing status while retaining the large-size women's chain brand City Chic. Anne McDonald, chairman of the company's independent review committee, said that retaining the growing City Chic and selling other brands is the best development plan at the moment, and the plan has been unanimously approved by the board of directors.

In 2017, it was reported that the investment company controlled by the Royal Family of Qatar was a potential buyer of Specialty Fashion but failed to reach an agreement. In April this year, Specialty Fashion rejected a $100 million acquisition offer from Anchorage Capital Partners for two brands, City Chic and Autograph.

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