Honey Birdette’s parent company PLBY Group has decided to retain its ownership of the lingerie brand after many months of attempting to sell.
The change in tune comes after the group placed Honey Birdette as a “discontinued operation”, meaning it will not report on the brand’s financial results, which also indicates PLBY was setting up to sell the business.
According to PLBY, the decision to retain follows reported improvement in PLBY’s balance sheet after successfully closing a long-term license agreement with an online entertainment business called Byborg Enterprises alongside “meaningful improvements” in operational metrics at Honey Birdette.
PLBY - the management firm of the Playboy brand - also noted future growth prospects “that are expected to significantly increase the value of the Honey Birdette business.”
“We enter 2025 in a strong strategic and financial position with $36 million of cash on the balance sheet resulting in $120 million of net senior debt,” PLBY Group CEO Ben Kohn said.
“Operationally we expect to generate approximately $120 million in total revenue, underpinned by significant guaranteed royalty and licensing payments, a leaner cost structure reimagined around an asset-light model resulting in positive cash flow and a much stronger balance sheet reflecting the equity investments and debt reductions.”
With the Byborg licensing partnership in place, and the transition to an asset-light model well underway, the transformed PLBY Group now is also expected to be cash flow positive in 2025 alongside reducing senior debt to below US$100 million (~A$160 million) by the end of the year.
PLBY anticipates using all of the net proceeds from a proposed US$25.4 million follow-on investment related to a previously announced securities purchase agreement to pay down its senior debt, with that agreement subject to stockholder approval.
The company added that if stockholders do not approve such investment, PLBY may not pay down its senior debt as anticipated, but management still expects the total enterprise would be cash flow positive.
“We have not only stabilized our business but are developing incremental opportunities for licensing growth in the future,” Kohn said. “With this strength, the company’s board of directors no longer believes it is the optimal time to explore strategic alternatives for Honey Birdette, and instead has decided to focus on continuing to grow the business which we believe could meaningfully increase its value.”
All this comes after Honey Birdette’s sales waned through 2024. In the second quarter of 2024, PLBY reported that the lingerie brand’s sales dropped by US$3.8 million, or 21 per cent year-over-year, due largely to an approximately 50 per cent reduction in the number of days on sale to help improve brand health and gross margin.
This followed a revenue bump-up in the first quarter of US$1.5 million, or 8 per cent year-over-year, to US$18.7 million.