Myer (ASX:MYR) Forms Strategic Retail Alliance With The Purchase of 65 Percent Stake in Sass and Bide
Sydney, Feb 7, 2011 (ABN Newswire) - Myer Holdings Limited (ASX:MYR) today announced that it will acquire a 65 percent stake in sass & bide ("sass & bide"), one of Australia's most respected and successful women's fashion brands, for A$42.25 million. Myer will have exclusive department store rights to distribute this iconic, designer brand, as well as benefiting from the expansion of both sass & bide's standalone store network, and its domestic and international wholesale businesses.
It is planned that sass & bide will be launched in approximately 30 Myer stores over the next 18 months.
Myer Chief Executive Officer, Bernie Brookes, said Myer's investment in sass & bide represents an excellent addition to Myer's brand portfolio, delivering a highly profitable business with significant growth potential.
"The investment in sass & bide is entirely consistent with our strategy for growth which is about opening new stores, investing in store refurbishments and refreshments, growing and leveraging MYER one and introducing new product categories, brands, concepts and concessions," said Mr Brookes.
"Sass & bide's highly experienced and successful management team will continue to drive the success of the business and will also provide us with valuable insights and exposure to specialty retail," he said.
About sass & bide
Sass & bide has grown significantly since it was founded in 1999, by two of Australia's most successful and recognisable fashion designers Sarah-Jane Clarke ('Sass') and Heidi Middleton ('Bide'). The business generated sales of around A$37 million in FY2010, delivering annual sales growth of over 50 percent over the past two years, an outstanding result in a difficult retail environment.
Sass & bide currently has 15 standalone retail concept stores across Australia and New Zealand. In addition it has wholesale arrangements in boutiques and department stores across Australia, New Zealand, US, UK, Asia and the Middle East. Sass & bide plans to open further retail stores over the next 18 months in Australia and New Zealand, as well as expand its international distribution.
Sass & bide founders and management support joint ownership with Myer
Sass & bide co-founder, Sarah-Jane Clarke, said teaming up with Myer would take sass & bide to the next level.
"We are very excited to be partnering with Myer, an iconic Australian brand. This partnership will help Heidi and I realise the dream we had for sass & bide 12 years ago when we were selling our jeans at Portobello market in London," said Ms Clarke.
Sass & bide co-founder, Heidi Middleton, said she was looking forward to being part of the new world-class Myer Melbourne store.
"Myer has committed to significant floor space across its stores which will ensure we offer a great range. We can also see great opportunities for our business to continue to expand overseas by working together to open standalone stores and sharing in Myer's sourcing, networks and supply chain," said Ms Middleton.
Sass & bide CEO, David Briskin, said sass & bide will continue to operate separately and retain the ability to harness the creative design and flair that has made the brand so successful to date.
"The investment by Myer ensures that we can accelerate our growth domestically, through opening concession stores in Myer, as well as numerous exciting growth opportunities overseas," said Mr Briskin.
Sass & bide roll-out in Myer stores
Myer Group Business Manager, Fashion and Accessories, Judy Coomber, is very excited about attracting the award-winning designers to Myer.
"Sass & bide is one of the most important designer labels in Australia. The label covers everything from the iconic sass & bide jeans to their unique ready-to-wear high fashion range," said Ms Coomber.
"As with every new label we take into our portfolio it has to fit within our brand hierarchy of Myer Exclusive Brands, Designers @ Myer, National and International Brands and Designer. The inclusion of sass & bide fills a gap in our offer," she said.
"Sarah-Jane and Heidi will lead the creative direction of the label ensuring that the essence of the brand is maintained. They will play an important role in many of our key events including fashion launches and spring racing.
"We look forward to building on their customer base, by adding Myer's loyal designer customers, who will no doubt enjoy this exciting new brand," she said.
Sass & bide will be sold in Myer stores as a concession arrangement as this allows the brand to manage its core brand proposition and allows customers to have a true sass & bide experience in our stores.
"We also recently signed exclusive agreements with two well-known and popular Australian designers, Arthur Galan and Simona. Securing these brands further establishes Myer as the premier destination for fashion in Australia," Ms Coomber said.
Under the proposed transaction, Myer will acquire 65 percent of sass & bide for cash consideration of A$42.25 million plus a small payment which is contingent upon sass & bide achieving performance targets in its FY2011 financial year. The acquisition is forecast to be earnings per share accretive in the year ending 31 July 2012 and exceed Myer's ROFE targets of twice WACC in year two.
Sass & bide's existing management will continue to operate the business on a day-to-day basis. Myer will have a controlling interest in sass & bide, subject to customary minority shareholder protections.
The transaction is expected to complete in April 2011, and is subject to customary transaction conditions being satisfied.
Flagstaff Partners and Clayton Utz acted as advisers to Myer and KPMG Corporate Finance and Arnold Bloch Leibler acted as advisers to the owners of sass & bide.
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Contact: Media Jo Lynch General Manager Corporate Affairs Tel: +61-438-101-793 Tanya Cherny National PR Manager Tel: +61-438-101-987 Investors Davina Gunn Investor Relations Manager Tel: +61-400-896-809 Media for Sarah-Jane Clarke and Heidi Middleton Maria Farmer Public Relations Tel: +61-2-9380-4477 Tel: +61-418-403-371