A.K.A. Brands, the parent company of Australian brands Culture Kings, Petal & Pup and Princess Polly, has refinanced its credit facility in a bid to support its next phase.
The US-listed group reported that the new US$120 million (~A$184 million) credit agreement — including an $85 million term loan and US$35 million revolving credit capacity — replaces its existing facility and extends debt maturity to 2028.
The new facility bears interest at the Secured Overnight Financing Rate (SOFR) plus 3.25 per cent to 3.75 per cent per annum, based on the ratio of the A.K.A. Brands’ debt secured by a first lien on any of the company’s assets as compared to the company’s adjusted EBITDA.
The latest trading update, covering the second quarter of 2025, shows A.K.A. Brands had an adjusted EBITDA of US$7.5 million, down from US$8 million in the second quarter of 2024.
For 2024, A.K.A.’s adjusted EBITDA was US$23.3 million, or 4.1 per cent of net sales, compared to US$13.8 million, or 2.5 per cent of net sales in 2023.
“We are pleased to announce this refinancing, which extends the maturity of our credit facility by two years,” A.K.A. Brands CFO Kevin Grant said.
“This financing agreement provides us with additional balance sheet flexibility to execute our strategic priorities and create long-term value for our shareholders.”
In the company’s last trading update, which showed an 8 per cent lift in net sales to US$161 million, chief executive officer Ciaran Long said much of this came from momentum in the United States, with Australia and New Zealand showing “steady signs of stabilisation."
“Our direct-to-consumer channels remain strong, and our omnichannel expansion continues to exceed expectations,” Long said. “Princess Polly opened three new stores in the second quarter and is on track to reach 13 locations by year-end, with plans to open 8 to 10 additional stores in 2026.
“We’re also deepening our wholesale partnerships to drive brand awareness and new customer acquisition. We’re especially excited about the successful chain wide debut of Princess Polly and Petal & Pup at Nordstrom, reinforcing the global potential of our brands.
“Culture Kings continues to advance its test and repeat merchandising strategy, with in-house brands growing double digits in the second quarter.”
Long added that the group’s sourcing diversification initiatives are on schedule, noting improvements in timelines, quality and cost.
“I’m confident that we have established a world-class, flexible supply chain that provides us the ability to adapt as our business grows and future trade dynamics evolve,” he said. “As we look ahead, I’m confident that we are well positioned to continue growing awareness across our brand portfolio, capture additional market share and drive profitable growth over the near and long term.”