At CNA Finance, we’ve been following Naked Brand Group (NASDAQ: NAKD) since before the Bendon merger. It’s hard to argue that what we’ve seen since has been anything but incredible as the Bendon merger has opened the doors to strong product offerings, better distribution, and a streamlined retail process. With recent news surrounding partnerships with CVS and Costco, the company’s growth plans seem to be on the right track and Naked is only getting stronger.
Bendon Brought Strength To NAKD
As mentioned above, we’ve been following Naked Brand Group since before the Bendon Merger. The completion of the merger was announced in June of this year, making Bendon shareholders the majority owners of the combined company, owning 7.124% of the combined company.
The Merger Brought Strength And Longevity To Naked Brand
Through the merger, Bendon brought incredible strength and longevity to Naked Brand, with a more than 70-year, successful history. At the time of the merger, Bendon brought 10 highly-productive brands to the company’s combined portfolio. Perhaps more importantly, the company brought its streamlined process to NAKD.
The unique retail operating platform brought to the table by Bendon is second to none. The company has greatly reduced risk in key areas like manufacturing and inventory. This, coupled with the company’s impressive movements online and strong retail presence with products in thousands of stores around the world, makes the Bendon merger a highly accretive one for Naked Brand Group.
Naked Closes One Of The Biggest Deals In Its History
Recently, Naked Brand Group announced a massive deal that approximately doubles the company’s brick and mortar retail footprint. In a press release, dated July 31, 2018, the company announced that Bendon Limited and CVS Health entered into an agreement.
As a result of the agreement, Bendon’s master licensed Heidi Klum Intimates Solutions line has been placed in more than 4,000 CVS locations throughout the United States. Considering that the company’s retail footprint consisted of just over 4,000 retail stores before the deal, the announcement means that in one move, the company has significantly expanded its retail footprint.
The Heidi Klum Intimates Solutions line consists of more than 20 essential wardrobe and red-carpet-ready products. The line includes dressing tape and converters, strapless, backless stick on silicone bras, and much more.
While the Intimates Solutions line being placed in CVS stores is a big win for Naked Brand Group, there’s another important positive here. The company said that its products will be carried within the cosmetics department. This is important as the cosmetics department typically sees the highest foot traffic of any department within CVS locations. So, not only does the deal mark the largest single retail footprint of any Naked Brand Group Limited licensed or wholly-owned brand, this footprint is highly optimized for foot traffic. In a statement with regard to the newly minted partnership with CVS, Justin Davis-Rice, CEO at NAKD, had the following to offer:
We are pleased to have launched a long-term strategic partnership with CVS Health, which has placed our high-margin Heidi Klum Intimates Solutions line in over 4,000 retail locations across the United States… This move greatly diversifies not only our distribution base, but our product offering as well, providing the Heidi Klum Intimates line representation outside of lingerie, but in a complementary category. In the first year, we expect significant retail sales from this relationship with a gross margin profile much higher than our traditional product lines. We look forward to further developing our commercial relationship with CVS Health to include other brands and products across our diversified portfolio.
Naked Brand Group Enters Agreement With Costco
In other news, Naked Brand Group recently announced that it has launched Bendon’s new mass-market diffusion program with Costco Australia. The new program features Bendon’s best-selling women’s comfortable brief design in a value oriented pack of five briefs at a retail price of AU$25.99.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on Naked Brand Group. In particular, we’re interested in following the story surrounding the company’s newly minted partnerships with CVS and Costco Australia, as well as the revenue these partnerships generate. We’ll also be following the company’s impressive growth in the eCommerce space as well as any corporate updates provided. Nonetheless, we’ll keep an eye on the news and bring it to you as it breaks.
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