The workwear business was selling into sectors of the economy that are in retreat, including manufacturing, but it is hard to see any part of PacBrands’ portfolio that is a definite keeper. Sales rose 3. 8 per cent in the year to June but PacBrands only got there by subsidising sale prices at the wholesale level.
A cashed-up Wesfarmers knocked on the door with an offer, PacBrands listened, and the business and its two iconic brands, King Gee and Hard Yakka, are transferring to Wesfarmers’ Industrial and Safety division for $180 million.
The underwear division that houses Bonds and other famous brands including Berlei, and Jockey lifted sales by 7. 7 per cent, but saw earnings before interest and tax fall by almost 19 per cent.
But as PacBrands and its adviser Macquarie consider strategic options, the question, is however, whether investors are buying in in anticipation of a recovery in PacBrands’ sales and earnings, or buying in anticipation of the Cheshire cat process continuing.
Read more here: SMH