Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Operating Segments

v3.21.1
Operating Segments
12 Months Ended
Jan. 31, 2021
Operating Segments  
Operating Segments
14 Operating Segments

 

Segment information

 

Identification of reportable operating segments

 

The consolidated entities’ Director examined the group’s performance from both sales channel and geographical perspective and identified three reportable segments being Retail, Wholesale and e-commerce.

 

Retail

 

This segment covers retail and outlet stores located in Australia and New Zealand.

 

Wholesale

 

This segment covers wholesale intimates apparel to customers in New Zealand, Australia, Europe and USA.

 

E-commerce

 

This segment covers the group’s online retail activities. E-commerce revenue includes revenue from a US brand called Fredericks of Hollywood (FOH) for which the Group currently has a licence agreement.

 

These operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer (who is identified as the Chief Operating Decision Maker (‘CODM’)) in assessing performance and in determining the allocation of resources.

 

The CODM reviews segment EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

 

EBITDA is a financial measure which is not prescribed by IFRS and represents the profit adjusted for specific non-cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity.

 

The information reported to the CODM is on a monthly basis.

  

Other Costs and Business Activities

 

Certain costs are not allocated to our reporting segment results, such as costs associated with the following:

 

- Corporate overheads, which is responsible for centralized functions such as information technology, facilities, legal, finance, human resources, business development, and procurement. These costs also include compensation costs and other miscellaneous operating expenses not charged to our operating segments, as well as interest and tax income and expense.

 

These costs are included with in “unallocated” segment in our segment performance.

 

Other assets and liabilities

 

Assets and liabilities are managed on a Group basis, not by segment. CODM does not regularly review any asset or liability information by segment and its preparation is impracticable. Accordingly, we do not report asset and liability information by segment.

 

  (a) Reconciliations

 

Reconciliation of segment revenue to consolidated statements of profit or loss and other comprehensive income:

    For the Year Ended 31 January 2021
NZ$000’s
   

For the Year Ended 31 January 2020

NZ$000’s

   

For the Year Ended 31 January 2019

NZ$000’s

 
Total segment revenue     89,590       104,153       136,842  
Intersegment eliminations     (9,551 )     (14,088 )     (24,922 )
Total revenue     80,039       90,065       111,920  

  

Reconciliation of segment EBITDA to the consolidated statements of profit or loss and other comprehensive income:

 

The Board meets on a monthly basis to assess the performance of each segment, net operating profit does not include non-operating revenue and expenses such as dividends, fair value gains and losses.

 

    For the Year Ended 31 January 2021
NZ$000’s
   

For the Year Ended 31 January 2020

NZ$000’s

   

For the Year Ended 31 January 2019

NZ$000’s

 
Segment EBITDA     690       (16,167 )     (25,602 )
Any other reconciling items     (68,902 )     (37,356 )     (24,892 )
Income tax (expense)/benefit     (134 )     (782 )     1,274  
Total net loss after tax     (68,346 )     (54,305 )     (49,220 )

 

Any other reconciling items includes brand transition, finance expenses, impairment expense, depreciation and amortisation, fair value gain/loss on foreign exchange contracts, and unrealised foreign exchange gain/loss that cannot be allocated to segments.

 

  (b) Geographical information  

 

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers whereas segment assets are based on the location of the assets.

 

    For the Year Ended 31 January 2021
NZ$000’s
   

For the Year Ended 31 January 2020

NZ$000’s

   

For the Year Ended 31 January 2019

NZ$000’s

 
New Zealand     34,131       33,786       40,703  
Australia     21,011       24,365       32,065  
United States     24,432       30,863       34,156  
Europe     465       1,051       4,996  
      80,039       90,065       111,920  

 

The revenues resulting from the Naked business combination in the June 2018 are included in the United States segment shown above.

 

  (c) Segment performance

 

    Retail
NZ$000’s
    Wholesale
NZ$000’s
    e-commerce
NZ$000’s
    Unallocated
NZ$000’s
    Total
NZ$000’s
 
For the year ended 31 January 2021                              
Revenue     40,492       7,496       32,051       -       80,039  
      40,492       7,496       32,051       -       80,039  
Cost of goods sold     (19,188 )     (4,636 )     (21,604 )     (719 )     (46,147 )
Gross profit     21,304       2,860       10,447       (719 )     33,892  
Other segment expenses*     (17,359 )     (1,425 )     (10,096 )     -       (28,880 )
Unallocated expenses                                        
Administrative expenses     -       -       -       (856 )     (856 )
Corporate expenses     -       -       -       (9,350 )     (9,350 )
Other income     -       -       -       4,223       4,223  
Other foreign exchange gain     -       -       -       1,661       1,661  
EBITDA     3,945       1,435       351       (5,041 )     690  
Brand transition, restructure and transaction expenses     -       -       -       (22,527 )     (22,527 )
Finance expense     -       -       -       (8,214 )     (8,214 )
Interest income     -       -       -       5       5  
Impairment expense     -       -       -       (4,895 )     (4,895 )
Depreciation and amortisation     -       -       -       (8,700 )     (8,700 )
Fair value gain on foreign exchange contracts     -       -       -       -       -  
Unrealised foreign exchange gain     -       -       -       1,981       1,981  
Fair value loss on Convertible Notes derivative     -       -       -       (26,552 )     (26,552 )
Income/(loss) before income tax expense     3,945       1,435       351       (73,943 )     (68,212 )
Income tax expense     -       -       -       (134 )     (134 )
Income/(loss) after income tax expense     3,945       1,435       351       (74,077 )     (68,346 )

 

* Other segment expenses relate to brand management expenses.

 

   

Retail

NZ$000’s

   

Wholesale

NZ$000’s

   

e-commerce

NZ$000’s

   

Unallocated

NZ$000’s

   

Total

NZ$000’s

 
For the year ended 31 January 2020                              
Revenue     42,576       15,554       31,935       -       90,065  
      42,576       15,554       31,935       -       90,065  
Cost of goods sold     (19,582 )     (11,342 )     (20,916 )     (4,407 )     (56,247 )
Gross profit     22,994       4,211       11,020       (4,407 )     33,818  
Other segment expenses*     (18,784 )     (3,112 )     (13,659 )     -       (35,555 )
Unallocated expenses                                        
Administrative expenses     -       -       -       (1,234 )     (1,234 )
Corporate expenses     -       -       -       (12,772 )     (12,772 )
Other foreign exchange loss     -       -       -       (424 )     (424 )
EBITDA     4,210       1,099       (2,639 )     (18,837 )     (16,167 )
Brand transition, restructure and transaction expenses**     -       -       -       (13,687 )     (13,687 )
Finance expense     -       -       -       (5,213 )     (5,213 )
Interest income     -       -       -       12       12  
Impairment expense     -       -       -       (8,904 )     (8,904 )
Depreciation and amortisation     -       -       -       (10,603 )     (10,603 )
Fair value gain on foreign exchange contracts     -       -       -       729       729  
Unrealised foreign exchange gain     -       -       -       310       310  
Fair value gain/(loss) on Convertible Notes derivative     -       -       -       -       -  
Income/(loss) before income tax expense     4,210       1,099       (2,639 )     (56,193 )     (53,523 )
Income tax expense     -       -       -       (782 )     (782 )
Income/(loss) after income tax expense     4,210       1,099       (2,639 )     (56,975 )     (54,305 )

 

* Other segment expenses relate to brand management expenses.

 

** Brand transition, restructure and transaction expenses are shown net of proceeds from the sale of Naked brand and trademarks.

  

   

Retail

NZ$000’s

   

Wholesale

NZ$000’s

   

e-commerce

NZ$000’s

   

Unallocated

NZ$000’s

   

Total

NZ$000’s

 
For the year ended 31 January 2019                                        
Revenue     50,348       29,439       32,133       -       111,920  
      50,348       29,439       32,133       -       111,920  
Cost of goods sold     (24,616 )     (24,582 )     (21,248 )     (4,034 )     (74,480 )
Gross profit     25,732       4,857       10,885       (4,034 )     37,440  
Other segment expenses*     (24,540 )     (9,667 )     (11,247 )           (45,454 )
Unallocated expenses                                        
Administrative expenses     -       -       -       (1,050 )     (1,050 )
Corporate expenses     -       -       -       (17,947 )     (17,947 )
Other foreign exchange gain     -       -       -       1,409       1,409  
EBITDA     1,192       (4,810 )     (362 )     (21,622 )     (25,602 )
Brand transition, restructure and transaction expenses     -       -       -       (10,075 )     (10,075 )
Finance expense     -       -       -       (4,041 )     (4,041 )
Impairment expense     -       -       -       (8,173 )     (8,173 )
Depreciation and amortisation     -       -       -       (2,382 )     (2,382 )
Fair value loss on foreign exchange contracts     -       -       -       (1,704 )     (1,704 )
Unrealised foreign exchange gain     -       -       -       2,258       2,258  
Fair value loss on Convertible Notes derivative     -       -       -       (775 )     (775 )
Income/(loss) before income tax expense     1,192       (4,810 )     (362 )     (46,514 )     (50,494 )
Income tax benefit     -       -       -       1,274       1,274  
Income/(loss) after income tax expense     1,192       (4,810 )     (362 )     (45,240 )     (49,220 )

 

* Other segment expenses relate to brand management expenses and some corporate expenses.