Watson watchful as Bendon heads to US stockmarket

AUCKLAND: Kiwi businessman Eric Watson has his eye on consumers, capital markets and acquisitions as Aucklandheadquartered lingerie brand Bendon heads to the US stockmarket.

On Saturday Bendon announced plans to merge with Nasdaqlisted US sleepwear company Naked in a deal.

Mr Watson, who owned about 70% of Bendon through his investment firm Cullen Investments, said the deal was worth about $138 million.

Mr Watson said an IPO for Bendon had been possible for a while, but was held up as it rebranded from Elle Macpherson to Heidi Klum.

‘‘The cost of rebranding was many millions,’’ Mr Watson said. ‘‘Sometimes divorces happen very quickly and this one did but it tells you a lot about Bendon — that it could change from one iconic brand to another and grow its business in the same period. Which tells you the sourcing, distribution and design was very strong because customers kept buying the brand.’’

Listing via a merger with a company already trading on the Nasdaq was a win for both companies he said, with Naked wanting to grow and Bendon wanting to list in the US.

‘‘It’s been far from easy but it’s a very efficient and effective method of creating value for shareholders and creating access to US capital markets, without going through an elongated IPO process and without having to raise a lot more capital,’’ Mr Watson said.

Naked Brand Group had a closing share price on Thursday prior to the announcement of $US1.04 ($1.46), and a market capitalisation of $US6.3m. In the 2016 financial year, Bendon made $US100m in sales.

‘‘The reason to access capital markets is to access capital to grow the company and the opportunities,’’ Mr Watson said. ‘‘Bendon’s made acquisitions in the past with Pleasure State, Lovable, Davenport, but having a public currency means it’s able to acquire more business and to grow.

‘‘Not much point being a public company and not growing the business so that’s one of the main reasons for going public.’’

A small selection of product is sold into the US but the merger would provide distribution channels across the country.

‘‘We have a presence in the US but we plan to increase that dramatically,’’ Watson said, adding it would also provide a channel to market Naked in Australasia.

Naked’s chief executive Carole Hochman, who will become chief creative officer of the merged company, was planning to promote the brands on a shopping network, which Watson said would bring the Bendon brand into around 94 million homes in the US. ‘‘We could end up being a very big company.’’