Looking through the latest investor presentation I had a squiz at the balance sheet summary. The company has significantly more current liabilities than they do current assets.

The company has $224m in current assets, which includes a healthy $65 million in cash. The majority of the rest is made up of inventory, which accounts for $145m of the current asset bucket. In the current liabilities section the business has a solid $201m in generically titled 'payables'. For this to be so large I am assuming it must include the lease commitments across the store footprint of 1,419 stores for the next 12 months. The net result is that current liabilities outweigh current assets by around $32m.

Incorporating the non-current assets and liabilities makes things look a little less precarious with net assets of $116m when accounting for these. However; my eyes are drawn to the combination of inventories and intangibles. Intangibles account for $118m and as stated previously inventory accounts for $145m ($263m combined if my maths is correct).

The potential problem that I see is that inventory and goodwill are linked. If you make a mistake on your inventory and it turns out to be worth less than you thought it was, then the goodwill will be the next domino to fall. History is littered with proud fashion resellers getting their inventory wrong. Hopefully these guys have everything in check!

Not all companies need a tailwind to be successful. In fact I'm sure the best companies are those that are successful regardless of the economic cycle, social trends or other factors that influence the environment in which they operate. However; a tailwind can result in a good company delivering an excellent return and an average company delivering a good return.

Noni B seems like a company with a plan that they are quietly delivering on. I haven't done a huge amount of research, but the plan seems to be: buy brands that appeal to a common demographic (I think this demographic likes 'nice-ish' looking clothes, but not overly fashion sensitive - I'm thinking my Mum here) where a common support function can be leveraged to reduce the cost of doing business across the group.

At this stage it is a bit early to say how successful they will be with this strategy. Revenue has increased by 140% thanks to the acquisitions, but like-for-like sales are down 3.1% compared to last year (although they called out that December trading was a modest 1% better than last year). In my mind the decline in organic sales is systematic of an industry in structural change. Certainly no tailwind here that will cushion the business if the strategy doesn't play out as planned.

Noni B have a brick and mortar network of 1,419 stores and are competing with businesses that have a brand footprint that enables significant online conversion (as opposed to a bricks and mortar footprint). If there is a tailwind for the business it is the general online thematic with the company quoting online growth for each of the last 6 quarters that is significantly stronger than the growth in fashion online in general. However; considering the acquisitions done I am not sure how fair this comparison is.

I look forward to watching how the strategy plays out and would like to see the business succeed because frankly it is depressing to see so many traditional clothing businesses struggle. However; I don't think I would invest in this sector and I certainly don't see success as a given for these guys; I think it will be a hard slog for them.