Noni B has revealed the reasons behind its decision to acquire five under-performing brands from SFG after the announcement was made yesterday.
The brand acquired the assets and businesses of Millers, Katies, Crossroads, Autograph and Rivers for $31 million in cash.
According to Noni B, the group will acquire 823 stores as part of the transactions across the five brands which will see its network of stores grow to over 1,400 locations across its 9 brands.
The group will also see its annual sales figures treble to around $1 billion based on CY2017 figures following the acquisition.
Noni B group managing director and CEO Scott Evans said the group was optimistic that it had the experience with struggling businesses to develop an approach to turn those brands around.
“The businesses we're acquiring are under-performing for a number of reasons. However, we believe our disciplined approach to costs of doing business, combined with our customer focus, will ensure a successful turnaround.
“One of the key benefits of this merger is that we will be able to quickly achieve a number of savings and efficiencies that we anticipate will result in the acquired portfolio of assets breaking even on a EBITDA basis in FY2019.
The acquisition is expected to generate merger benefits through efficiencies in cost of doing business of approximately $30 million with shared services efficiencies and supply chain optimisation expected to be crucial to the turnaround.
Noni B group chairman Richard Facioni said that the group would follow the same blueprint that has been previously employed by the group in other turnarounds.
“We're very confident in our ability to improve the performance of the Speciality assets, as Scott and the team will be adopting the same approach we have previously employed in successfully turning aruond the Noni B and Pretty Girl businesses.
“As before, our focus will be on quickly driving integration benefits, improving supply chain and sourcing, then driving growth.”