Speciality Fashion Group has today announced a sale of five of its brands to woman's clothing company Noni B for $31 million in cash.
The five brands included in the sale are Millers, Katies, Crossroads, Autograph and Rivers which generated an EBITDA loss of $6.2 million in the 12 months prior to December 2017.
SFG retained ownership of City Chic which the group claims is their most profitable brand with the business expected to deliver an underlying EBITDA of between $19 and $20 million for FY18.
Speciality Fashion Group chair Anne McDonald said the group had identified the challenge behind turning around the businesses included in the sale and that directors unanimously supported the sale of the businesses.
“As part of the structural review, the independent review committee carefully considered a range of options, including whole of company transactions, divestment of brands and a capital raising.
“The board considers that a significant turnaround is required to reset the other businesses in the portfolio, and that this would require time, capital and carry material execution risk.”
Speciality Fashion Group CEO Daniel Bracken said the group was looking to develop the City Chic brand and would use the funds from the sale to back the brand.
“City Chic has achieved considerable success embracing and leveraging the forces disrupting retail and has executed its omni-channel strategy exceptionally well.
“With online representing 37% of sales and strong brand recognition in Australia, New Zealand and increasingly overseas, the growth potential for this truly customer-led brand is significant.”