Australian-born lingerie brand Honey Birdette has recorded a USD$4.1 million (AUD$6.4 million) drop in revenue for the third quarter of 2023 - down 19% year-on-year.
Total revenue for the quarter was USD$17 million (AUD$26.6 million).
Parent company PLBY Group cited a reduction in Honey Birdette’s days on sale by 85% as a key factor in the revenue slip.
Despite the double-digit percentage drop in revenue, PLBY Group CEO Ben Kohn said the promotional shift has improved the brand’s gross margins.
“We reduced Honey Birdette’s total days-on-sale during the third quarter from 66 days to just ten days,” Kohn said. “During the quarter, Honey Birdette’s sales were down 19% as a result of the significantly lower promotional environment; however, Honey Birdette’s gross profit margin increased by three percentage points.”
Kohn said the company will continue to limit Honey Birdette’s days-on-sale in order to maintain the integrity of the brand as a premium offering “rather than a brand that chases sales through perpetual promotions.
“In October, a month in which we did not run a sale this year or last, our sales were up over 16% year-over-year,” Kohn said. “We are also very focused on profitability. To that end, we have made the decision to increase prices by 10%, which will take place gradually from the 4th quarter of 2023 through the 2nd quarter of 2024, to combat rising inflation.
“We have also eliminated free expedited shipping and raised the threshold for free standard shipping,” Kohn continued. “We have not seen any impact on consumer spending from these changes at this point.
“We will closely monitor the overall financial impact of all of these changes when taken as a whole and make refinements as needed.”
The shift comes as PLBY Group restructures its operations towards a capital-light model. Through 2023, the company sold its lingerie brand Yandy as well as its sexual wellness brand Lovers.
Kohn said the company is now increasing its focus on exploring strategic alternatives for Honey Birdette.
“As we are not currently convinced about selling 100% of that business in today’s market, we are looking at ways to maximize the potential growth of Honey Birdette without burdening our balance sheet,” he said.
Total revenue for PLBY Group in the third quarter, which also includes its media and lifestyle brand Playboy, dropped by 27% to USD$33.3 million (AUD$52.2 million).