Kiwi businessman Eric Watson has his eye on consumers, capital markets and acquisitions as Auckland-headquartered lingerie brand Bendon heads to the US stockmarket.
On Saturday Bendon announced plans to merge with Nasdaq-listed US sleepwear company Naked in a deal Watson, who owns about 70 per cent of Bendon through his investment firm Cullen Investments, said was worth about $138 million.
Watson said an IPO for Bendon had been on the cards for a while, but had been held up as it went through the rebranding process from Elle Macpherson to Heidi Klum - the new face of the brand.
"The cost of rebranding was many millions," 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," Watson said.
Naked Brand Group had a closing share price on Thursday prior to the announcement of US$1.04 ($1.46), and a market capitalisation of US$6.3m. It's share price soared over the weekend to US$1.70. For the 2016 financial year, Bendon generated US$100m ($144m) in sales.
"The reason to access capital markets is to access capital to grow the company and the opportunities," 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 at the moment 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 that it would also provide a channel to market for 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," he said.
Victoria's Secret was the biggest player in the US market, Watson said, but the hundreds of other smaller players created an opportunity for further acquisitions.
Watson's investment firm Cullen Investments bought Bendon in 2002 for $1.90 per share valuing the company at $58.7m. In the latest NBR rich list survey, Watson was estimated to be worth $420m.
Bendon was founded in NZ in 1947 by former naval officer Ray Hurley and his brother Des, a pattern cutter. The firm now has offices in Sydney, New York, London and Hong Kong.