Deal makers rifling through the racks of Australia’s fashion industry have found their next target. Street Talk understands 16 parties are trying on affordable fashion retailer Vine Apparel for size, put up for sale by FTI Consulting in August.
Sources say potential buyers span trade, strategic and private equity investors, predominantly local but the e-commence business is also getting some overseas interest.
Current interest is in the range of $30 million to $35 million based on an EBITDA multiple of 5 to 6 times. However, this could be higher with the e-commence business’ earnings averaging $8.5 million over three years, seeing it go north of $40 million.
Shelley Du Flou is the founder of Vine Apparel. Louie Douvis
Potential investors were told Vine makes $40 million at the revenue line and is forecasting $70 million by the 2026 financial year. It’s normalised EBITDA positive to the tune of $6.2 million and is tipped to reach $12.7 million by FY26. Profit margins are sitting at more than 15 per cent and digital marketing spend is about 20 per cent of gross sales.
While retail has proved a challenging market to draw in capital, sources say potential buyers are attracted to its history of profitability and cash returns, scalability and healthy outlook off a relatively small operation on Sydney’s northern beaches.
Vine positions itself as an affordable e-commerce retailer for everyday women with a punchy social media strategy. It sells breezy sun dresses around the $70 mark.
FTI Consulting senior managing director Ben Shrimpton is working to get the business out of a buyer’s shopping cart. The firm is also busy selling affordable fashion clutches and evening bag business Olga Berg and was on the sale of swimwear brand Seafolly earlier this year.
Vine was founded by Shelley Du Flou some 14 years ago.
According to the teaser, Vine boasts average monthly volumes exceeding 30,000 orders, and a low returns rate of 6.5 per cent. It has 400,000 active customers – those who have bought in the past 12 months – 70 per cent of whom are returning shoppers.
