Noni B has finalised its $31 million deal for Specialty Fashion Group’s stable of beleaguered fashion brands.
First announced in May, the sale saw Noni B more than double the size of its business by acquiring the Millers, Katies, Crossroads, Autograph and Rivers brands.
After years of struggling with declining earnings Specialty Fashion has been left with just one brand, City Chic, in what chair Anne McDonald described as a new beginning for the business.
“With the right corporate structure now in place, City Chic is well positioned to further strengthen its customer-led approach and execute its strategy to become a global brand,” she said on Monday.
“We look forward to watching [Noni B] continue to develop and grow these businesses with an owner that is well placed to support the next stage of their journey.”
Noni B chief executive Scott Evans is now tasked with overseeing a broad based turnaround of the specialty stable, with an eye on breaking even in FY19.
The brands posted a combined $25.7 million EBIT loss in 2017, but Evans believes applying Noni B’s retail discipline as well as some necessary capital investment will return the brands to black.
While market conditions in the woman’s fashion sector are subdued, Evans said in May that Noni B’s projections were conservative, but that further analysis would need to be undertaken.
“Whether that’s transformation or a revolution … I couldn’t tell you,” Evans said in May.
A Noni B spokesperson said the company would discuss the future of the brands in August, with the announcements of results.
A freeze on new store openings has already been put in place, while under the last months of SFH ownership more than 300 stores in the now 750-store portfolio were closed.
For Specialty Fashion the coming months will be about cementing its sole focus on expanding the profitable City Chic business, moving forward debt-free and without distraction.
There will also be a leadership change when current CEO Daniel Bracken steps down later this year for City Chic boss Phil Ryan.
That won’t be the only leadership changes at Specialty Fashion though, a board renewal program is in motion to reflect the new structure of the business, with a search already underway.
It was not revealed who would be leaving or joining the SFH board in any forthcoming reshuffle.
SFH has also secured an amendment to its loan facility, reducing it from $22 million to $15 million, while also securing a term extension to 28 February 2021.
After paying down debt the company said it expects to report that there will be significant unused facilities available after the transaction completes.
