Pacific Brands has sold its shoe and some of its clothing businesses in three deals, worth $39 million.
Gone is the Brand Collective part of the business, which is responsible for 15.5% of sales, including clothing Superdry and Mossimo, plus shoes Volley, Hush Puppies, Julius Marlow, Clarks and Grosby.
Pacific Brands announced that it has entered into three agreements to sell the Brand Collective business.
- Footwear and Apparel 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.
- Sport brands Dunlop and Slazenger will be sold to IBML, a division of UK-based Sports Direct International Plc, who owns these brands outside Australia and New Zealand. The Everlast equipment licence from IBML to Brand Collective will be terminated 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 which will license the Dunlop, Slazenger and Everlast brands from IBML.
The cash raised will be used to pay down debt, currently at about $170 million.
Pacific Brands expects to book a loss on the sale of $30 million in the 2015 financial year.
The Brand Collective business reported sales of $204.5 million and an EBIT loss of $22.3 million or $0.9 million before significant items in the year to the end of June.
Pacific Brands CEO David Bortolussi says the sale is consistent with the strategy to simplify and focus on maximising the potential of Bonds and Sheridan.
“While this has been a complicated divestment to execute, the transactions are all unconditional and should be completed within two weeks with minimal disruption to customers and our core business,” he says.
In August the company agreed to sell its workwear division to Wesfarmers for $180 million after posting a $224.5 million full year loss.
Sales were up 3.8% to $1.322 billion for the year to June 30 with Bonds underwear up 19.9% and Sheridan sheets up 15.6%.