Best & Less Group Holdings Ltd

ASX:BST
Deleted on 2023-07-23 00:30:05

Best & Less Group Holdings Ltd

ASX:BST
Deleted on 2023-07-23 00:30:05
$1.890 (+0.8%)
Last close price
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0
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Forum Topics BST BST CEO Appointment

Pinned straw:
Rick
Last edited one year ago

Today Best & Less announced the appointment of Erica Berchtold as the new CEO. Erica has an impressive 20 year track record of growing brands in retail (see announcement below for details). I think Erica’s leadership experience at THE ICONIC where she built revenues to $700 million will be particularly valuable for Best & Less and the online business. I am not familiar with THE ICONIC but my daughter said she buys most of her clothes through the online-only fashion and lifestyle retailer.

The Board has been searching for a CEO since February this year when Rodney Orrock left the business to prioritise his long-term health following a period of medical leave due to lymphoma.

Jason Murray had been leading the business as Executive Chair while BLG has been searching for new CEO. Jason is a competent leader having led BLG previously and this allowed the Board to take its time to find the best candidate to take the business forward from here.

ASX Announcement: CEO APPOINTMENT

“Leading value apparel specialty retailer Best & Less Group Holdings Limited (ASX:BST) (BLG or the Company) today announces the appointment of Erica Berchtold as Chief Executive Officer, effective 4 September 2023.

Erica is a highly regarded senior retail leader with over 20 years’ industry experience and a strong track record of growing brands.

She joins BLG from THE ICONIC, Australia’s largest online-only fashion and lifestyle retailer, where she has been CEO since 2019 and has grown the business to over $700 million in net annual revenues.

Prior to THE ICONIC, Erica was Managing Director of Super Retail Group’s Rebel sporting goods division, which has 155 stores across Australia and New Zealand, where under her leadership revenues grew significantly to nearly $1 billion over seven years. Previously, she worked for Specialty Fashion Group as General Manager for Crossroads and Autograph, two women’s fashion apparel brands with more than 200 stores across Australia.

A customer-focused and data-driven retailer, Erica brings deep experience across the retail value chain, from merchandising through to retail operations and digital and online development and execution. Her customer-first approach has consistently led to dramatic improvements in customer satisfaction and strong growth in revenues and profits.

Erica has received industry recognition throughout her career, including #3 in the Top 50 People in e-Commerce awards for 2023, being nominated for the NSW Women of the Year Awards and InStyle Women of Style Businesswoman of the Year Award, and was named Michael Page Retail Executive of the Year in 2016.

She is a Council Member of the Australian Retailers Association, a graduate of the Australian Institute of Company Directors and former President of the Australian Sporting Goods Association.

Best & Less Executive Chair, Jason Murray said, “After an extensive global search, I am delighted to announce Erica Berchtold as the next CEO of Best & Less Group. Erica’s strong retail experience and track record of delivering profitable growth in a variety of retail markets, alongside her proven leadership skills, makes her the ideal candidate to lead the business through its next phase of growth.

“The Board has been extremely impressed by Erica’s passion for our customer and category, and her value creation mindset. We look forward to working closely with Erica and BLG’s senior leadership team to deliver our strategy to extend our market position in the value retail apparel segment.”

Erica Berchtold said, “I am looking forward to joining Best & Less Group at such an exciting time in the company’s growth journey. The team has done a fantastic job to build strong foundations for future growth, and I am excited by the challenge of executing the next phase of our growth strategy. BLG’s brands are synonymous with quality and value and having a close affinity with mum and her family. As a mother of three young children myself I can personally attest to that and I look forward to deepening that relationship further to move us closer to our goal of being the number one choice for mums.”

Erica will join BLG on 4 September 2023 after serving out her notice period. Jason Murray will remain as Executive Chair until Erica joins, before returning to his role as Non-Executive Chair.”

Disc: Held IRL (11%), SM (22%)
NewbieHK
12 months ago

I am confused by this acceptance. As one of the better performing retail companies. The thought that the saviours have arrived undermine the results the company has produced. In normal times this would be priced significantly higher. So new owners come in the economy turns around and the price jumps to over $3. Is it the new owners or just timing and market sentiment. The associated news article was terrible pointing out online sales were down by 30%, whilst, not noting that this was more related to a post covid return to in store shopping. Anyway, it will provide an opportunity to get in or top up for those interested in a dividend stock that is not likely going anywhere. Oh and the suggestion this is a baby boomer stock (also in the new article) shows a lack of research. One only needs to walk into a Best and Less and observe the age demographic of those shopping in the baby and kids section. Last time I checked there weren’t too many 60 year olds having babies, whilst, the Best and Less babies section is full of 20-30 year old mums and expectant mums. I just can’t help feel this smells of the new football coach, coming into a team about to show its potential and will receive all the glory.

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rh8178
12 months ago

Hi @NewbieHK - to me its the transfer of the investment from the impatient (PE with a 3 to 5 year exit mandate) to the patient. Whether that transfer of ownership between these two means value gets transferred as well - time will tell. I think the selection of the CEO is interesting, her comments on taking the job a few months ago were definitely directed at the mum demographic. On latest forecast from the company, we're talking a stock on a forward PE of less than 10, with no debt, and assuming profit sticks a high ROE so it definitely makes it an interesting situation. I think there's some work to do to get the business rolling again too, based on last result which was a bit mixed - like for like sales down and online down - given Ray Itanui's current business went to full online recently (Sanity), I'm hoping he can sort that out. I hold IRL and I'm sticking with it (and considering topping up - given what looks like reasonable odds).

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Byrnesty
12 months ago

@Rick Are you able to explain what is going on with BST.

I added this to my watchlist after getting interested following your recent posts.

Takeover announcement today at 10% discount to the 3 month VWA and last closing price and reduced by any dividends paid after the announcement.

Offer to be accepted by major holders.

WHY?

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rh8178
12 months ago

Hi @Byrnesty - will steal @Rick thunder here...I follow this one - and I hold IRL and in SM.

My interpretation is that this is about providing an easier exit for Allegro and former CEO to exit without demolishing the share price.

My reasoning - I notice in the announcement that it only has a 55% minimum acceptance condition - meaning that the takeover can be finalised without taking full control - BBRC are at 55% between BBRC itself's holding, and Allegro and Jason announcing they are supporting the bid.

Given it's pitched at a discount to current price - I think that's intended as not many other shareholders would likely sell at that price. Put more plainly the intention is not for BBRC to take full control (or at least they don't want to pay a premium now and don't have to, to get control). Ultimately, I think this is a legal way of BBRC taking out Allegro and Jason, without having to go through the trouble of having to get shareholders to agree to waive the takeover rules to allow BBRC to go over 20% - which is uncertain, costly and takes time. Where we end up I think is BBRC with over 55%, and but not much more and it continues on as a listed company, albeit with a very big brother.

This is the usual PE imperative, even if at a lower price, Allegro have to exit at some point in a 3 to 5 year time frame - it's a big problem for PE, sometimes they are forced to exit, even great companies at lower prices due to mandates. Not something someone like BBRC ever worries about.

So then the decision is, as an investor are you happy to sit in a company with a major shareholder that has over 50%, that has obvious stock liquidity issues (not to mention how minorities fare in these situations...sometimes).

But, it's Brett Blundy and he is a retailing genius (think Lovisa, Sanity, Bra's n things, Dusk) - for mine, it's still a good business at an attractive price with high ROE, and now with an astute retailer holding a majority stake - if Brett thinks it's worth lifting his stake, I think that is something significant to think about. So I'm going to be staying in for the moment.

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Byrnesty
12 months ago

Thanks @rh8178 for those insights.

That all makes perfect sense and actually makes BST even more attractive in my eyes...and selling at a discount as a result.

I'm now a small holder IRL.

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Rick
12 months ago

@Byrnesty, sorry for the slow reply. I agree with @rh8178 ’s comments.

My wife and I are on a road trip down to The Great Ocean Road for a few weeks and we still have a week to go. Explains why you haven’t heard from me on Strawman lately.

I saw the take over news in Street Talk in the AFR early this morning which was later confirmed by the ASX announcement.

I started a straw this morning but haven’t had time to finish. I’ll get back to it soon. Just a quick sum up for now. I am very excited about the Blundy and Itaoui take over offer. These are two of the smartest retailers in the business and I think they have seen an opportunity to snap up a good business at a bargain price. I’ll be holding every share I own for now and can’t wait to see what the duo have in mind for the business from here. A 55% stake in Best & Less is a huge commitment and these guys have a strong track record of turning businesses into winners!

Back soon with more.

Cheers,

Rick

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rh8178
12 months ago

I should clarify also, I did hold in SM, but sold. Still hold IRL. Also hold Lovisa and Dusk IRL.

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nessy
12 months ago

Great commentary @rh8178 , @Rick and @Byrnesty . I hold IRL and was slow to respond (trying to get stuff done before a 10 week work and holiday trip!). Although I don't love the idea of a takeover below the then current price I can understand the arguments that this makes the company stronger. There are some great people in charge and I look forward to holding for a while yet! Might even increase mum's stake for the divvies!

Nessy

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