Naked Brand Group Inc. (NASDAQ:NAKD) Merges With Bendon Limited To Form Iconic Brand

Naked Brand Group Inc. (NASDAQ:NAKD)

Naked Brand Group Inc. (NASDAQ:NAKD)

Naked Brand Group Inc. (NASDAQ:NAKD) has signed a definitive merger agreement with privately owned Bendon Limited. The two companies are to become fully owned subsidiaries of Bendon Group Holdings Limited, a newly formed holding company based in Australia.

Naked-Bendon Merger

Under the terms of the agreement, Naked Brand Group Inc. (NASDAQ:NAKD)’s shareholders are to receive 7% of the combined company upon the deal closing. The merger has already been approved by each of the board of directors of the two companies. However, Naked’s shareholders must unanimously approve the deal prior to its closing.

“We are pleased to have reached a definitive agreement with Bendon, which is the culmination of much hard work. We believe that this merger is structured to benefit our shareholders as well as the go-forward business. We look forward to closing this transaction in due course,” said Naked’s CEO, Carole Hochman

The merger is also subject to satisfaction of closing conditions as well as attaining regulatory approvals. Bendon Group Holdings shares will have to be listed on the NASDAQ or NYSE as part of the deal. The two companies expect the deal to be completed by the end of October.

Bendon’s executive chairman, Justin Davis-Rice expects the combined company to result in a powerful portfolio of iconic innerwear, sleepwear, as well as swimwear brands. The executive also expects the merger to enhance the combined company’s strength in the global industry leading to long-term growth.

Q4 Financial Results

Naked Brand Group Inc. (NASDAQ:NAKD) comes into the deal having seen its fourth quarter loss narrow to (-$2.6) million from (-$10.6) million reported the previous year. Net loss for the full year ending January 31, 2017, came in at $10.8 million down from $19.1millon for the fiscal year 2016.

Net sales in the quarter were up by 21.9%, coming in at $0.55 million compared to $0.45 million reported in Q4 2016. Full year net sales increased by 32.6% to $1.8 million compared to $1.4 million reported the previous year.

Gross margin in the quarter soared to 49.3% from $39% the same period of fiscal 2016. Naked Brand Group Inc. (NASDAQ:NAKD) has attributed the increase to enhanced production efficiencies as well as a product mix/shift benefit. Naked exited the first quarter with cash and cash equivalent of $0.9 million compared to $4.8 million as of January 31, 2016.

Naked Brand Group Inc. (NASDAQ:NAKD) ended Thursday’s trading session by dropping 15.98% and ending the day at $2.05 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Author: Monica Gray

Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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