Naked Brands divests lingerie brand Bendon for $1

Naked Brands Group will divest from Auckland-based lingerie chain Bendon following a unanimous shareholder approval.

Naked chairperson and chief executive Justin Davis-Rice and Bendon chief executive Anna Johnson will buy the chain for $1 from the wider group, which will forgive a $40 million loan and provide $7 million of support to maintain inventory and product design, according to a report in the NZHerald.

The divestment is expected to free up available capital for Naked Brands, and is part of a wider push to exit its unprofitable bricks-and-mortar operations to focus exclusively on a rapid acceleration of its e-commerce business.

“With available cash of $270 million, a clean balance sheet with no debt and a re-invigorated management team and board of directors, I could not be more excited to execute on our business strategy to ultimately drive revenue growth with positive free cash flow,” said Davis-Rice.

“[Last Friday’s] vote closes the chapter on the company’s underperforming bricks-and-mortar business and now positions Naked for the next cycle of growth initiatives that we expect to reward shareholders in 2021 and beyond.”

Bendon has delivered losses of more than NZ$78 million since it was acquired in 2017, and could have likely ended in liquidation had Naked Brands not successfully raised capital earlier this year after a Reddit-fueled short squeeze pushed the brand’s stock up 700 per cent.

Bendon sells through David Jones in Australia, and has a number of bricks-and-mortar locations across New Zealand.

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