Australian fashion brands Culture Kings and Princess Polly are tipped for further international expansion, with Korea, Japan and Canada cited as new target markets.
US-based parent company AKA Brands reported net sales outside of US and Australia were $71.8 million across 184 countries and territories in 2022, representing 12% of total sales.
“We have identified several markets in which we believe we can introduce one or more of our brands in the future, such as expanding Culture Kings in Korea and Japan and Princess Polly in Canada, Europe and the UK,” AKA Brands noted in its annual report.
“Additionally, we plan to enter into key markets through strategic wholesale partnerships. We believe our experience growing the Princess Polly and Petal & Pup brands in the US creates a proven roadmap to help us introduce our brands globally."
Princess Polly is planning to pilot its first-ever store in the back half of 2023 in California. It has also signed a wholesale agreement with major American retailer PacSun, which will carry up to 50 Princess Polly styles online and in 15 stores beginning this month, with a broader rollout to follow.
PacSun currently operates over 350 stores across North America.
In November last year, Culture Kings opened its first US store in Las Vegas and operates seven stores in Australia and one location in New Zealand.
For Q4 2022, AKA Brands reported an 18.3% decrease in net sales to $149.1 million compared to the prior corresponding period, and an increase in net sales for the 2022 fiscal year of 8.8% to $611.7 million. On pro forma basis, its net sales in CY22 is 0.3% adjusting for the acquisition of Culture Kings.
Its 10-K financial report noted that historically, net sales generally increased sequentially quarter-to-quarter as it made acquisitions.
“However, in 2022, our net sales were impacted by foreign currency exchange rates, inflationary pressures on consumers globally and our supply chain, shifts in global spending in anticipation of a potential economic slowdown or recession, increasing labor rates and a slower-than-expected recovery from the economic impacts of the COVID-19 pandemic in Australia,” the report revealed.
AKA Brands CEO and director Jill Ramsey commended her team for their efforts in 2022, and the fourth quarter in particular.
“As we went through the quarter, we saw lower marketing effectiveness given the highly promotional environment, and we made the strategic decision to reduce our spend compared to last year in an effort to balance growth and profit,” Ramsey said.
“Additionally, as we aggressively tightened our inventory in the second half of the year, there were fewer new styles in our women’s brands during the peak holiday selling period.
“These decisions, combined with the macroeconomic pressures, impacted our performance in the quarter but enabled us to protect the integrity and durability of our brands and business model for the long term.”
Ramsey said that its 2023 plans are on scaling the business for growth.
“The omnichannel initiatives we announced today, including the opening of our first Princess Polly store in Southern California in the back half of the year and testing wholesale, set the stage for continued growth and profitability.
“We remain firmly committed to building great next-generation brands for the long-term, and I am confident that we have tremendous runway ahead of us.”
AKA Brands has acquired a number of Australian brands in recent years including Culture Kings, Petal & Pup and Princess Polly.