Naked Brand Group Inc (NASDAQ:NAKD) is apparel and Lifestyle Company focused on more intimate innerwear products for both men and women. The company specializes in men’s and women’s underwear, loungewear and sleepwear under the company’s Naked brand name. The brand is marketed as fabric that feels like nothing else.
The global intimate apparel market is worth as much as $82 billion, representing a massive opportunity for the company. It is expected to grow 17 percent through 2020, making Naked Brand a compelling investment opportunity.
Shares have performed exceptionally well in the last few months, with shares already gaining 109 percent year to date, giving the company a $21.6 Million market cap – this brand has significant room to grow. Revenues in the last year have already risen 150 percent. The company has also put an increased emphasis on their e-commerce presence, essential for any retail brand.
“We do find that we do as much business on Bloomingdale’s e-commerce site as we do in the store. Now we’ve been trying to make Amazon a big resource for us, as well as maintaining our own e-commerce site, wearnaked.com. Even if you had a website before, it’s changing now. The wonderful thing about Naked is that there is a story. People are into their own well-being and into feeling comfortable. We are not a licensor, not a celebrity brand, we have our own brand and our own mission story. So people can love the product and find us for themselves,” said CEO Carole Hochman in a interview.
Naked brand recently regained compliance with its NASDAQ listing requirement, a rule that requires the company to maintain a minimum of $2.5 million in stockholders equity, or risk being delisted from the NASDAQ Capital Market. This is certainly a good sign for the company, given the fact that just six months ago, Naked Brands got a letter stating it was not in requirement at that time.
Naked is not a new brand, the company has been selling since 2010 and since then has developed a solid reputation and has built relationships with many top retailers, including HSN, Macy’s and Bloomingdale’s. The company also secured several top endorsements, with stars Heidi Klum on the intimate apparel and undergarment side, while Chicago Bulls star Dwayne Wade, is representing the men’s athleisure category.
Despite the brands good reputation, the company is in need of capital support, and that is what has prompted a potential merger with Bendon limited.
Earlier in the month, Naked Brand had entered into a Letter of Intent regarding the merger with Bendon Limited, a worldwide leader in intimate apparel. The deal is a key catalyst for Naked Brand and appears as a perfect fit, aligning themselves with one of the major players of the industry will help ensure the brand remains stable from a capital perspective. In January, Naked issued 119 million shares to Bendon shareholders under the terms of the Letter Of Intent.
“They have a great vision. Naked will be brand equity, where it has great potential for reach. In Australia, Naked can go to other stores, the product is so right for that marketplace, there really wasn’t any product like it there. Bendon has up to about 60 outlet stores and several high-end retail stores, maybe one in New Zealand. I don’t know what their exact plans are but I do know they are excited to have the Naked brand as part,” added Hochman.
The deal appears to be a win-win for both companies. It will enable Naked Brands to utilize Bendon’s strength and management expertise as well as the companies established wholesale and retail distribution channels worldwide, to deliver value for shareholders, Bendon has a 70 year history in the industry.
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Disclosure: We have no position in NAKD and have not been compensated for this article.