Consumers buying into Hugh Hefner’s provocative Playboy Bunny aesthetic now have new fashion and lifestyle options on their hands.
On Tuesday, Playboy inked a $333 million deal to acquire Honey Birdette, the racy lingerie brand created as a “platform for confidence and sexual and body empowerment,” Eloise Monaghan, founder and managing director of the Australian luxury intimates maker, said in a statement.
The apparel expansion comes in the wake of PLBY Group, Playboy’s parent company, returning to the public markets last year after a deal with a blank-check company valued the Los Angeles-based, nightclub-focused firm at $415 million. PLBY Group said the Honey Birdette deal will support its focus on “expanding its leadership in the sexual wellness category and enhance its shared sourcing and product design capabilities” for Playboy’s own intimates line.
What’s more, the deal comes as seismic changes are underway in the lingerie market. Victoria’s Secret recently backed away from the ultra-sexy image it crafted in recent decades, pivoting toward a female empowerment mantra in lieu of its longtime flesh-first approach. The shift leaves a hole in the market that Playboy’s move shows it’s eager to fill.
According to Playboy, Honey Birdette has developed a loyal customer base, with 50 percent of purchasers younger than 34 and a 57 percent to 43 percent female/male split. Repeat purchases drive 60 percent of all net sales and these spenders’ average lifetime revenue tops $760. Brand followers drive roughly 80 percent of organic e-commerce traffic, Playboy said. Honey Birdette plans to open new flagship stores in Dallas, Miami and New York, adding to its 60-store brick-and-mortar footprint across Australia, the U.K. and the U.S.
PLBY Group CEO Ben Kohn believes Honey Birdette holds the “potential to become a multi-billion-dollar luxury lifestyle franchise.”
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“I’ve been enormously impressed by Eloise and the rest of the Honey Birdette team and the organic, rapid growth they’ve driven,” he added.
Kohn said PLBY Group plans to leverage its global reach to accelerate Honey Birdette’s expension into new territories and product categories, like loungewear and swim, while the Aussie label’s product design, sourcing and direct-to-consumer capabilities knowhow will aid Playboy-branded lingerie and sexual wellness offerings.
“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,” Kohn said.
For the first quarter ended March 31, the PLBY posted a net loss of nearly $5.0 million on a 34 percent rise in net revenues to $42.7 million, driven by a 114 percent growth in direct-to-consumer revenue. The loss in the year-ago quarter was $2.4 million on revenue of $31.8 million.
At the time of Playboy’s earnings report, Kohn said: “Our strong first quarter financial performance reflects the exciting growth potential of our direct-to-consumer business, which experienced triple digit revenue growth year-over-year as we successfully increased merchandising, cross-selling, and influencer marketing programs. I’m especially pleased with our results considering we continue to experience short-term, industry-wide supply chain disruptions leading to out-of-stocks on select items.”
Once the deal is completed, Honey Birdette will join a PLBY brand portfolio that includes Playboy, Yandy.com and Lovers.
Playboy will acquire the brand in a cash-and-stock transaction—comprised of $238 million in cash and $95 million, or 2.2 million shares, of PLBY Group stock that’s set to close in the third quarter of 2021. The company said Honey Birdette expects about $73 million of revenue and $28 million of earnings before interest, taxes, depreciation and amortization for the 12 months ending June 30, 3021. Those figures represent growth of over 40 percent and 95 percent, respectively, over the prior year period, Playboy said.