Honey Birdette co-founder Eloise Monaghan says Playboy-owner PLBY Group is the perfect partner for the Australian-based lingerie chain and it plans to open dozens of stores in the northern hemisphere.
PLBY, a “pleasure and leisure lifestyle” company listed on the NASDAQ, approached Honey Birdette six months ago and, after months of due diligence, agreed to buy the business for $US333 million ($443 million) in cash and stock.
Ms Monaghan, who co-founded Honey Birdette in 2006 with her former partner, Janelle Barboza, owned 15 per cent of the company and will collect about $66 million in cash and shares. Financial Review Rich Lister Brett Blundy’s BBRC International owned 62 per cent and former Sanity Music executive Ray Itaoui’s Rayra Pty Ltd owned 21 per cent.
Ms Monaghan, who has been based in Los Angeles for two years and who will stay on at Honey Birdette as creative director, said she would never have sold to a business she did not admire.
“This is my baby,” Ms Monaghan told The Australian Financial Review.
“We had Australian companies and private equity groups from all over the world [looking at the business] but nothing felt right,” she said.
“When Playboy [appeared] and I had my first meeting with [chief executive] Ben Kohn … this company is exactly what Honey Birdette embraces. We’re the perfect partners – they’re into sexual health and wellness and female empowerment.”
The expansion plans are huge. I can see Honey Birdette having at least 40 stores in Europe and 40 in the US.
— Eloise Monaghan, Honey Birdette founder
Honey Birdette is known for its racy lingerie and standards-skirting advertising and has received negative publicity over the treatment of its sales assistants, known internally as “honeys”.
PLBY, which sells Playboy-branded apparel, condoms, sex toys and other merchandise, said the acquisition would expand its brand portfolio with a new high-end franchise and provide product design, sourcing and direct-to-consumer capabilities it would leverage to grow its core apparel and sexual wellness businesses.
“The expansion plans are huge,” Ms Monaghan said. “I can see Honey Birdette having at least 40 stores in Europe and 40 in the US.”
“We opened in Las Vegas recently and took $43,000 in the first three hours and they had to shut down the centre because the lines were so big,” she said. “We’ll soon open in Dallas, London, New York, Miami and Scottsdale, Arizona.
Honey Birdette would also expand into new categories including swimwear, loungewear, athleisure and everyday basic underwear, incorporating design elements from its most popular lingerie products.
Honey Birdette has 60 stores in Australia, the US and UK and expects revenue to grow 40 per cent to $73 million and earnings before interest tax depreciation and amortisation to almost double to $28 million in the 12 months ending June, boosted by demand for lingerie during the pandemic. The deal valued Honey Birdette at almost 16 times earnings.
The acquisition will significantly increase PLBY’s revenue. The company, which was founded by Playboy founder Hugh Hefner, reported sales of $US148 million in 2020 and had forecast revenue of $US200 million this year.
“We are extremely excited to welcome Honey Birdette to PLBY Group,” Mr Kohn said. “We strongly believe in the power of brands, and are thrilled by Honey Birdette’s potential to become a multi-billion-dollar, luxury lifestyle franchise,” he said. “I’ve been enormously impressed by Eloise and the rest of the Honey Birdette team and the organic, rapid growth they’ve driven.”
“This acquisition is expected to further our mission to become the leading pleasure and leisure lifestyle platform and our commitment to deliver long-term value to our shareholders,” Mr Kohn said.
The deal, which was signed in Los Angeles on Tuesday and which is expected to close in the third quarter of 2021, followed the sale of Mr Blundy’s Bras N Things lingerie chain to US apparel giant Hanesbrands for $500 million in 2018.
Mr Blundy, now based in the Bahamas, was the founder of Bras N Things and Sanity Music. BBRC currently holds stakes in fast fashion jewellery chain Lovisa, homewares chain Adairs, footwear retailer Accent Group and youth apparel retailer Universal Store.
Earlier this month Mr Blundy agreed to invest $40 million into the Best & Less clothing chain in return for a 16.4 per cent equity stake, enabling the company to revive plans for a $60 million initial public offering.
Last year, Ms Barboza sued Mr Blundy and BBRC International for $1.1 million, alleging he acted unconscionably and breached a contract when he exercised an option to buy her out of the business in 2014. Ms Barboza lost the case earlier this year, when Justice John Bond rejected her claim she was short-changed.