PGR and Brand Collective

Today’s AFR mentionedthat Anchorage Capital have hired advisors to look at their exit options for BrandCollective (BC holds a mix of owned and licensed brands, including footwear brands Volleys, Shoes & Sox, Grosby,Hush Puppies and Julius Marlow and clothing brands Mossimo, Superdry and Elwood).According to the article, it has sales of $230m and is profitable (but noprofit details given).

Brand Collective has a lot of similaritieswith PGR (particularly Designworks), and any sale would put a current marketvalue on these types of businesses. More importantly, BC could provide someM&A opportunities for PGR. From my perspective, given both Colliseum andAnchorage are looking to exit, there is a great opportunity to combine these 2businesses ahead of a broader sale. One thing that both businesses suffer fromis a lack of scale from an equity market perspective, and a combination of the2 would provide significant synergies, as well as providing scale that wouldenable to stock to be included in the ASX 300, thereby improving liquidity andprice. Brands Collective also mentioned in January that it was looking to addto its Australian brand portfolio, and I can’t think of a better portfolio andwilling seller than PGR.