American company PLBY Group has classified Australian-born lingerie brand Honey Birdette as a “discontinued operation” as of the third quarter of 2024.
As a result, all financial and operational figures presented in its third quarter report exclude any statistics from the Honey Birdette business.
It comes as the group continues to explore options to divest the lingerie business, with these plans made public in January this year.
Being listed as a discontinued operation does not indicate the ceasing of Honey Birdette operations altogether. According to one document from PLBY group, the company found that Honey Birdette "constituted a disposal group" and met criteria to be classified as discontinued operations, as the divestiture of Honey Birdette is part of PLBY's strategic shift to a capital-light business model, and its sale will have a major effect on PLBY's operations and financial results.
"Its assets and liabilities are classified as current assets and liabilities held for sale in the condensed consolidated balance sheets for all periods presented," PLBY reported.
For the second quarter of 2024, Honey Birdette recorded a 21 per cent fall in sales - down US$3.8 million, or A$5.77 million - which PLBY claimed was largely due to a 50 per cent reduction in the number of days on sale as the holding company focused on brand health and gross margin.
Honey Birdette’s fall in revenue in the second quarter this year added to an overall direct-to-consumer plummet across the PLBY Group of 26 per cent to US$14.5 million, with total revenue across the business down by around US$10 million, or 29 per cent.
In the third quarter, PLBY Group - which manages its core Playboy brand - recorded a total sales fall of 21 per cent (excluding Honey Birdette) to US$12.9 million. According to PLBY, “substantially all of the decrease was due to a decline in licensing revenue attributable primarily to the termination of two China licensees in late 2023.”
This was partially offset by growth in the company’s digital subscriptions and content segment.
For PLBY overall, total net loss was US$33.8 million compared to a net loss of US$7.2 million in the third quarter of 2023, due primarily to “impairment charges on intangible assets” and the decline in the licensing business.
Alongside the performance struggles across the business, PLBY Group has also signed a deal to restructure its senior debt facility, reducing its outstanding term loans to a principal amount of approximately US$152 million.
In connection with its debt restructuring, the company will issue US$28 million of a new convertible preferred stock which matures at the end of 2027. The preferred stock includes a 12 per cent annual dividend rate, starting in six months, which will be payable in cash or in-kind, solely at PLBY Group’s discretion.
“This year we have taken substantial and necessary actions to strengthen our balance sheet and restore Playboy to its iconic roots, establishing a more sustainable path forward,” PLBY Group CEO Ben Kohn said.
“The restructured debt, coupled with the approximately $30 million in total cash we now have, provides us a stronger financial foundation moving forward.”