Australian-born lingerie brand Honey Birdette has recorded a US$4.1 million loss in sales in the second quarter of 2023, according to its parent company PLBY Group.
This is an 18.2% year-over-year decline to $18.3 million from $22.4 million.
The company claimed consumers are still looking for discounts, citing just small declines in traffic to stores and the Honey Birdette online shop, yet substantially lower conversion rates.
Honey Birdette’s comparable store sales were up significantly in May, according to PLBY, due to its successful Memorial Day sale.
Overall, PLBY reported a total revenue of $35.1 million versus $47.9 million in Q2 2023 compared to Q2 2022.
Of the $12.8 million decline in revenue, $5.6 million was attributable to licensing, $4.1 million to Honey Birdette, and $3.3 million was attributable to playboy.com consumer products - partially offset by a $0.2 million increase attributable to the Company’s digital and other segments.
Direct-to-consumer revenue from continuing operations declined 27.2%% year-over-year to $19.7 million, PLBY reported.
“Our second quarter financial results reflect ongoing challenges in the direct-to-consumer space,” PLBY Group CEO Ben Kohn said. “Honey Birdette continues to face macroeconomic headwinds, especially in Australia. The China economy continues to be weak from a consumer spending perspective, and the geopolitical situation is challenging, which makes collecting money from China more difficult.
“For example, a licensee which owed us $3.8 million by the end of the second quarter has only paid us $2.6 million, to date. Therefore, we were not able to book the full revenue from that license in the quarter.
“We are working with our joint venture partner on the plan we discussed during our Q1’23 earnings call to take back our e-commerce stores from an ownership and brand perspective, as we clean up past licensing agreements.”
Kohn said while the company navigates headwinds impacting its revenue performance, it made progress in reducing expenses across PLBY Group.
“In addition to the cost cuts we previously outlined, we have identified another $8.5 million of potential savings, a part of which we have already taken out,” he said. “Furthermore, this quarter was burdened by approximately $1.7 million of losses associated with business wind-down and transition costs and $0.6 million of EBITDA being taken out as a result of discontinued operations presentation.”
The Q2 2023 update follows a strategic review of Honey Birdette this year.
Kohn confirmed in early May that the group had retained Moelis & Company to assist with the strategic review process. Sage Group has also been enlisted to conduct a review of its Lovers apparel brand.
“Given the continued strong performance of our creator platform, which has maintained a weekly GMV CAGR north of 10% since the beginning of the year, with GMV up 2.4x in Q1, we have made the decision to fully exit operating our consumer products businesses and to focus all our efforts on our creator platform and licensing business," Kohn had said.
PLBY Group has not yet set a timetable for completion of the strategic review process.
In April, PLBY reported that Honey Birdette will open an additional 15 retail locations across the United States by the end of 2024. The company also exited from its Yandy subsidiary and announced a strategic incorporation of its sexual wellness brand Lovers into the core business.
PLBY confirmed its lifestyle and media brand Playboy and Honey Birdette were expected to become its core apparel brands.