Myer buys sass & bide for $42.5m

MYER has announced its $42.5 million purchase of high-end fashion label sass & bide.

MYER has announced its $42.5 million purchase of high-end women's fashion label sass & bide.

Referring to the purchase as "steak knives" during an analysts' conference, Myer CEO Bernie Brookes said that the buy would contribute a whole lot more than just a fashion range.

The deal would give Myer "stand alone store expertise" through sass & bide CEO David Brisken who - along with designers Sarah-Jane Clarke and Heidi Middleton - would be secured with lock-in clauses in the contract.

Myer purchased 65 per cent of the company now with the remaining 35 per cent optioned based on the earnings per share returned.

The buy also delivers Myer the sass & bide design team who will join the Myer design group with the expectation of leveraging the department store's supply chain logistics to expand the accessory market.

The purchase would allow Myer to "stretch the brand portfolio over the next few years using [the Myer] supply chain," Mr Brookes said.

Given that denim provides 25 per cent of sass & bide sales - quoted by Mr Brookes as being $37 million for the year with FY11 on track to reach $40 million - and accessories a third of sales, the design team gain was strategically significant.

Mr Brookes said: "It's a set of steak knives; there's not one particular benefit - it's all of it."

Myer sales were down $1.733 million, 3.54 per cent for the half year and down 5.19 per cent on like-for-like basis.

Mr Brookes characterised consumer confidence as "fragile", telling analysts that in his 30 years of retailing he had not seen this level of price deflation with the increased discounting as being experienced currently.

"This is the most unique and challenging period," Mr Brookes said.

"The consumer is fragile and changing week to week. I've given up trying to predict the consumer."

Source: DailyTelegraph