Honey Birdette is facing a restructure this year alongside sister brand Playboy, with parent company PLBY Group expecting to save $15 million in costs on an annualised basis.
The restructure will focus on two areas: business growth and simplifying operations.
PLBY Group said Honey Birdette will see an additional 15 retail locations across the United States by the end of 2024, buoyed by strong results for the current 10 stores in the country. It said that its US stores performed better than the 48 Australian stores on various metrics. It also operates three stores in the United Kingdom.
In lifetime customer value, Honey Birdette’s US stores accrued $637 compared to $300 in Australia, with average order value at $231 in the US compared to $135 in Australia.
PLBY added there is potential to transform its US direct-to-consumer Playboy business to a higher-margin joint venture licensing model.
Honey Birdette and Playboy are expected to become the core brands for PLBY Group, with the company planning to exit or divest from its etail label Yandy, and strategically incorporate its sexual wellness brand Lovers into the core business.
CEO Ben Kohn said the restructure began with a strategic review last year.
“We have reduced leverage and are evolving our strategy to move to a capital light model entirely focused on our most valuable brands, Playboy and Honey Birdette,” Kohn said. “This restructuring will eliminate a minimum of $15 million of costs on an annualized basis.
“Our new strategy will provide us with a mix of robust cash flow through our licensing segment, significant growth potential through our creator platform, which is growing at 9% week-over-week, and Honey Birdette.
“Further, it reduces operational complexity by eliminating unprofitable business units and non-core assets.”
For the 2022 fiscal year, PLBY’s revenue grew 8% year-over-year (YoY) to US$266.9 million. Its fourth quarter (Q4 ’22) revenue was US$68.5 million.
Direct-to-consumer (DTC) segment revenue was US$186.6 million for FY22 and US$48.3 million for Q4 '22, and its digital segment revenue was US$18.7 million for FY22 and US$4.6 million for Q4 ’22.
Honey Birdette reported the highest jump in DTC revenue in 2022 of US$83.6 million compared to US$32.3 million in 2021. PLBY said 66% of Honey Birdette’s revenue came from returning customers in 2022, and that its gross product margin was at 74%.
Kohn said that PLBY Group must evolve to match the changing economic landscape.
“Our new plan better aligns our achievable goals with our current investor base, who value the efficient use of capital, higher margins, and ample runway to execute our business priorities using less financial leverage.”