Noni B optimistic on acquired brands as existing business's profits soar

By

Sandra Halliday

Published
Aug 30, 2018

Australia’s Noni B is upbeat about making a profit within the next two years from the fashion brands it bought from Speciality Fashion Group and said it has had no nasty shocks relating to the Millers, Katies, Crossroads, Autograph and Rivers brands since paying A$31 million for them last month.

It expects to continue the turnaround strategy it has already successfully executed with other acquisitions for its new brands.

“What we've done with the Noni B brand and then when we purchased Pretty Girl [Fashion Group], it's the same philosophy - that's what we intend to apply to Specialty,” CEO Scott Evans told The Australian Financial Review after news of a fivefold net profit rise to A$17.3 million for the 2018 financial year.

The five acquired brands were lossmaking to the tune of A$12.1 million but their new owner expects to make a profit by 2020 via fewer markdowns, better stores and products, plus a cut in costs for marketing and sourcing.

Chairman Richard Facioni added that the acquisition was a major step on a similar scale to the 2016 purchase of Pretty Girl, with the company’s overall acquisition strategy having made Noni B one of the most important fashion retailers in Australia.

The Alceon Group of which Facioni is a director took control of Noni B in 2014 when it had turnover of around A$100 million and wasn’t profitable. Following its latest buy, it’s a business with turnover of around A$1 billion.

Its sales, excluding the Specialty brands, rose 17.6% to A$372.4 million in the latest year with like-for-like sales up 4.5%, and those comps accelerating in the second half compared to the first.