The parent company of Playboy will acquire Australian lingerie brand Honey Birdette, a move that expands Playboy’s direct-to-consumer (D2C) reach as Victoria’s Secret — formerly the dominant force in the lingerie market — continues its brand overhaul.
PLBY Group Inc., which went public earlier this year through a merger with a special=purpose acquisition company, said on Tuesday (June 29) that it will pay approximately $333 million for Honey Birdette, 71 percent of which will be cash.
Ben Kohn, CEO of PLBY Group, said that after the acquisition is complete in the third quarter, the company plans to leverage its global operations to bring Honey Birdette into new territories and product categories, as well as take advantage of Honey Birdette’s “superior” product design, sourcing and D2C capabilities to accelerate the Playboy brand.
“More specifically,” Kohn told analysts and investors, “it allows us to launch Playboy lingerie, swimwear and accessories in a much quicker fashion than if we were to build it ourselves.”
PLBY Group’s stock was up almost 8 percent following the announcement.
The move comes as Honey Birdette prepares to expand its retail footprint across the U.S., the U.K. and Europe, opening flagship stores in Dallas, Scottsdale, Miami and New York. Last month, Honey Birdette opened its first U.S. store in Las Vegas.
With Victoria’s Secret spinning off as an independent company and launching a new brand image, there may well be room in the U.S. market for an up-and-comer to shake things up, especially with the power of Playboy behind it. Still, Honey Birdette will have to distinguish itself from other D2C brands, such as ThirdLove, Adore Me and True & Co, if it hopes to find a place in the American woman’s wardrobe.
Eloise Monaghan, founder and managing director of Honey Birdette, said in a statement that this is a “momentous and proud day” for the 15-year-old company. “I’m thrilled to join Ben and the whole PLBY Group team on a mission to build a lifestyle of pleasure for all,” she said.
Expanded Reach
Kohn said this acquisition is a “critical first step” as Playboy continues its transformation from a licensing business to a “high-growth D2C company.”
Once the acquisition is complete, 70 percent of Playboy’s revenue will come directly from the consumer, compared to 43 percent last year, the company said. Another 22 percent of revenue will come from licensing, with the remaining 8 percent from digital subscriptions.
Honey Birdette will also give Playboy a foothold in the Asia-Pacific region, further diversifying Playboy’s geographic footprint. In addition to a sales presence, Playboy is also picking up Honey Birdette’s production infrastructure in Australia.
And the impact of physical stores in a market cannot be understated, Kohn said, with data showing a direct correlation between the opening of a retail location and growth of eCommerce — meaning that more Honey Birdette stores are on the way to the U.S. market.
Playboy has been ramping up its pace of acquisitions over the past year as it repositions itself as a “global lifestyle brand” focused on sexual wellness, apparel, lifestyle and beauty. In February 2020, Playboy acquired online intimates retailer Yandy, which Kohn said brought substantial eCommerce infrastructure to the company along with a “significant base of customers seeking sexual wellness products.”
Earlier this year, Playboy also agreed to purchase sexual wellness chain Lovers, another step toward greater omnichannel retail capabilities.
Influence of Influencers
More than 50 percent of Honey Birdette customers are under 34, with 40 percent of overall customers coming back to shop for more. Repeat purchases represent more than 60 percent of the brand’s revenue.
Perhaps more impressive, though, is the fact that over 80 percent of Honey Birdette’s web traffic is organic, which Playboy executives attributed to the brand’s success on social media. Honey Birdette currently has 1.1 million Instagram followers, and even in the U.S., social media influencers and celebrities are showing off their purchases.
Similar to Playboy, Chief Financial Officer Lance Barton said, Honey Birdette doesn’t pay the influencers to wear their products — the company may provide the merchandise, but Barton said influencers and celebrities are “wearing it because they love the brand.”
“So there’s a huge opportunity … to rapidly expand that throughout the United States,” Barton said. “And then, as we look at Europe and other places in the world, that’s pretty impressive.”
Playboy projects that if it is able to replicate Honey Birdette’s Australian success stateside, the brand could generate over $500 million annually just in the U.S. on their existing product base of lingerie and accessories.
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