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Pacific Brands divests Brand Collective business
20
Nov '14
Aussie apparel and footwear marketer, Pacific Brands said it has entered into three unconditional agreements to sell its Brand Collective business in the footwear, apparel and sport categories.

“Gross proceeds from the transactions of approximately $39 million, on a cash and debt free basis, will be applied to further reduce net debt,” Pacific Brands said.

Pacific Brands expects to complete all the transactions on or around December 1, 2014.

The footwear and apparel segment will be sold to Australian private equity firm, Anchorage Capital Partners.

Owned brands, including Grosby, Julius Marlow and Volley, as well as licensed brands Clarks, Hush Puppies, Mossimo and Superdry, and the Iconix Joint Venture will transfer with the business.

Sport brands, Dunlop and Slazenger will be sold to IBML, a division of UK-based Sports Direct International Plc, which owns these brands outside Australia and New Zealand.

The Everlast equipment licence from IBML, will be terminated in connection with the sale.

Sport assets related to the Sport business, including Everlast equipment, will be sold to Designworks, a division of Australian listed company - The PAS Group.

The carrying value of related net assets to be disposed is expected to be approximately $66 million at completion.

Subject to cost of disposal and completion adjustments, Pacific Brands expects to recognise a loss on sale of approximately $30 million in the financial year ending June 30, 2015.

In the financial year ended June 30, 2014, the Brand Collective business reported total sales of $204.5 million and reported EBIT loss of $22.3 million or $0.9 million before significant items.

“An element of corporate and shared services costs allocated to the Brand Collective business will be unrecovered following full transition of the business, estimated to be approximately $2 million per annum net of savings from associated restructuring initiatives,” Pacific Brands added.

CEO David Bortolussi said, “The sale of the Brand Collective business is consistent with our strategy to simplify and focus Pacific Brands on maximising the potential of our market leading brands such as Bonds and Sheridan.”

He added, “From a pricing perspective, the divestment represents good value to our shareholders for an unprofitable division and this transaction also represents the conclusion of the strategic review.

“The divestments of Workwear and Brand Collective will dramatically simplify Pacific Brands and significantly improve the overall quality and growth prospects of the brand portfolio.

“We will continue to consider other options to build shareholder value including further investment in our brands, wholesale partnerships, retail stores, online, category expansion and international distribution.” (AR)

Fibre2fashion News Desk - India

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