The rumours circulating last week regarding a possible Sass & Bide buyout by Myer have rung true.
Documents on the Australian Securities Exchange (ASX) today confirmed that the department store will acquire a 65 per cent stake of the Australian designer label for a cash consideration of $42.25 million, plus a small payment which is contingent upon Sass & Bide achieving performance targets in its FY2011 financial year.
Myer's now significant stake in the Sass & Bide label forms a strategic retail alliance that will see the department store claim exclusive rights to the iconic brand, as well as benefiting from the label's standalone store network, and its domestic and wholesale businesses.
The transaction is expected to complete in April 2011, with Sass & Bide to be launched in approximately 30 Myer stores over the next 18 months.
The deal is Myer's first since listing on the ASX last year and one that will surely impact rival department store David Jones, who has relied on the Sass & Bide line as a leader in its women's brands in recent years.
Although Myer will have a controlling interest in Sass & Bide, the label will continue to operate separately and existing management will continue to operate the business on a day-to-day basis.
Sass & Bide chief executive David Briskin and Myer group business manager, fashion & accessories, Judy Coomber both said Sass & Bide – in particular its founders Sarah-Jane Clarke and Heidi Middleton - will also retain the ability to harness the creative design and flair that has made the brand so successful to date.
“As with every new label we take into our portfolio, it has to fit within our brand hierarchy,” Coomber said. “[But] Sarah-Jane and Heidi will lead the creative direction of the label, ensuring the essence of the brand is maintained. They will play and important role in many of our key events, including fashion launches and spring racing.”
According to Sass & Bide co-founder Middleton, the tie-up will allow the label to use Myer's sourcing, networks and supply chain to grow the Sass & Bide brand and take it to the next level.
“Myer has committed to significant floor space across its stores, which will ensure we offer a great range. We can see great opportunities for our business to continue to expand overseas by working together,” Middleton said.