Huge losses continued at Naked Brand Group jumping to $3.19 million (in the quarter ended April 30), compared to a loss of $2.54 million for the same three months last year. Simultaneously sales rose by just 1.7%, to $455,160 from $447,627, as business at third party e-commerce sites increased dramatically, while department store sales were cut in half.
Naked, a public company, is close to merging with New Zealand-based Bendon Limited, a privately-held firm which claimed sales of about $100 million in 2016. The combined entity is expected to continue as a public company later this year.
According to Naked’s quarterly financial statement, “Increases in sales from third-party ecommerce sites and in sales to specialty and retail accounts were substantially offset by a decrease in sales to department store accounts.” Sales during the quarter to department sales “were approximately $115,600 or 25.4% of total net sales, as compared to 53.6% [or about $240,000] during the same period in 2016. The reason for the decrease in department store sales is as a result of a reduction in sales to Nordstrom, due to the elimination of in-store inventory at Nordstrom stores. In addition, there was a reduction in sales to Bloomingdales and Soma as a result of initial bulk up orders of newly launched women’s products in the comparative period.”
And despite the sizable loss for the quarter, as well as a recent multi-million dollar infusion of cash from a stock offering, Naked has not been keeping up on its royalty payments to Dwyane Wade, the basketball star and its recently-named creative director. The company made a deal with Wade in 2015 to use his name on a collection of men’s and boy’s underwear and loungewear.