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Naked Brand Group Ltd. (NAKD) Stock Prices Trending Down as Pandemic Continues to Devastate the Economy

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Naked Brand Group Limited (NAKD) stock prices were down by 2.60% as of market close on June 15th 2021, bringing the price per share down to USD$0.7169 at the end of the trading day. Subsequent pre-market fluctuations saw the price fall by another 1.45%, bringing it to USD$0.7065.

New e-Commerce Status Quo

with the onset of the global coronavirus pandemic having devasted the retail space with the forced closure of brick-and-mortar stores, buyers and sellers have turned to e-commerce. NAKD, too, has followed this trend as a means of circumventing pandemic-related regulations and government-mandated restrictions. The company went so far as to completely dispose of its brick-and-mortar operations on account of their lack of profitability, as per an announcement near the start of the fiscal year 2021.

Bendon Ltd. Divesting

The drastic restructuring efforts culminated in the signing of a nonbinding and non-exclusive term sheet that would see the divestment of NAKD from its subsidiary Bendon Ltd. The subsidiary will be divested to a group composed of existing NAKD management, as the company focuses its attention exclusively on its strategy to facilitate the rapid acceleration of the proliferation of its e-commerce business.

Reallocation of Resources

Subsequent to the completion of the divestiture, the allocation of resources and efforts towards the development of the Frederick’s of Hollywood online business has taken top priority. NAKD has also indicated plans to capitalize on the strategic acquisitions available in the e-commerce market space. This is done in the hopes of not only consolidating the existing online business but facilitating the additional generation of cross business operational synergies.

Scope of e-Commerce Business

Recent capital generation has had the funds deployed for complimentary growth business in the e-commerce sector, which boasts high margins. This move could also see future investments in technologies to better serve customers with a positive experience of the company’s online offerings. The company finds itself with unprecedented capital to invest where it sees fit, given the absence of the unprofitable Bendon business leeching capital to keep it afloat amid consistent and significant losses.

Future Outlook for NAKD

After the completion of the divesting project that was in the works for a very long time and presented many obstacles to the management team from an operational and financial standpoint, the company is poised to capital on its newfound weightlessness. With a strong balance sheet, no reported debt, and an operating model that is asset-light, the company forecasts continued success in a very favorable M&A environment in global e-commerce businesses. Current and potential investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

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