RCG Corporation acquires Hype DC
The deal will see RCG, whose brands include The Athlete’s Foot and Dr Martens, acquire 60 of Hype DC’s stores across Australia. Hype operates 57 Hype DC and three Shubar retail stores in Australia, predominantly in metro and major regional locations. The Trans-Tasman retailer said the acquisition will be earnings accretive in the 2016/17 financial year.
“Hype is an outstanding business that is perfectly aligned to RCG’s strategic objectives,” said Hilton Brett, RCG CEO.
Brett said bringing Hype into the RCG family will “unlock benefits and opportunities for the stakeholders of both businesses including staff, suppliers, customers and RCG shareholders.”
RCG said there will be no changes to the existing operating structure of either of the existing RCG businesses or Hype in the short term.
The company also confirmed Danny and Cindy Gilbert, who founded Hype, will continue to manage the business. Danny Gilbert has been appointed by RCG as its new executive director.
The retailer said its 2015/16 underlying earnings before interest, tax, depreciation and amortisations (EBITDA) is likely to be $60 million — the top-end of its guidance range.
Underlying earnings in the 2016/17, including the Hype DC deal, is expected to come in at $90 million.
Read more about RCG’s strategic rationale over the $105 million acquisition in this weeks edition of Inside Retail Weekly.
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