Good news for shoppers: Millers, Katies and Rivers given last minute lifeline
Fans of Australian clothing outlets Millers, Katies and Rivers have woken up to some good news this morning, with confirmation fashion retailer Noni B will be purchasing the long-suffering chains from Speciality Fashion Group.
9news.com.au reports the $31 million cash deal will add 823 stores to Noni B’s already busy portfolio of brands including Rockmans, W.Lane and BeMe.
Speciality Fashion Group will also lose control of Crossroads and Autograph as part of the deal, but will retail ownership over its last remaining brand, City Chic.
Noni B CEO Scott Evans was bullish about the acquisition, saying the five brands had the potential to treble the group’s total annual sales to around $1 billion.
"This is another exciting step forward for Noni B Group and represents the acquisition of five well-known and established, iconic Australian brands that are both complementary and highly synergistic to our existing portfolio," said Mr Evans.
"With the acquisition of the Specialty Assets, Noni B Group will become one of the pre-eminent woman's apparel retailers in Australia, whilst retaining our solid, focussed market position."
The brands purchased by Noni B posted a loss of $6.2 million for the 2017 calendar year, but Mr Evans believes the Noni B Group has the means to turn the brands around.
"The businesses we're acquiring are underperforming 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," said Evans.
"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 an EBITDA basis in FY2019, whilst we work to improve their overall operating performance."
Specialty Fashion Group chair Anne McDonald said this deal will give the Group more time to concentrate on developing the City Chic brand.
"In a challenging and rapidly changing retail environment, SFH has been successful in building City Chic into a market leader in the attractive plus-size segment of the women's apparel market," said McDonald.
"The business has strong cash flow generation and significant future earnings growth potential.
"The transaction will provide the funding flexibility, corporate structure and management focus required to realise City Chic's longer term full potential."
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