PLBY Group CEO Ben Kohn has made it official that Honey Birdette, the Australian lingerie retailer acquired by the company for USD$333 million in 2021, is up for sale. Kohn announced this decision at a recent business conference, emphasizing that while Honey Birdette is currently performing well, it does not align with the company’s long-term vision.
The announcement comes on the heels of Honey Birdette experiencing revenue setbacks throughout 2023. In the third quarter of the same year, the brand reported a significant loss in sales, amounting to US$4.1 million or AU$6.23 million.
Moreover, PLBY Group has been streamlining its portfolio by divesting two other subsidiaries, Lovers and Yandy, alongside the decision to sell Honey Birdette. Kohn mentioned that operational improvements have been made within Honey Birdette, reflecting positively on its performance.
Kohn shed light on the challenges faced post-acquisition, citing inventory issues and pandemic-related disruptions in various Australian states. Despite the hurdles, the company managed to enhance gross margins by 300 basis points in Q3 2023, signaling a strategic shift towards profitability.
Another strategic move involved altering shipping and pricing policies at Honey Birdette. The company now charges customers for expedited shipping and implemented a 10% price increase to offset rising labor costs.
Notably, Australia accounts for 42% of Honey Birdette’s trade, with the United States being its primary market at 45%. Online sales contribute significantly to the brand’s revenue, constituting 60% of its overall sales.
Interestingly, every new retail store opening has resulted in increased e-commerce sales in the corresponding region. Kohn mentioned that each new store incurs an approximate cost of $700,000 for construction, with stores boasting 30% EBITDA margins.
PLBY Group, the parent company of Honey Birdette, is a global enterprise focusing on pleasure and leisure products and experiences. While Playboy remains its flagship brand, the divestment of Honey Birdette signifies a strategic realignment within the company’s portfolio.
As the Australian lingerie market continues to evolve, the fate of Honey Birdette under new ownership remains uncertain. The industry’s response to this development and the potential impact on consumers and competitors are aspects worth monitoring in the coming months.
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