L Catterton exits Australia’s Seafolly

The transaction was first reported by The Australian Financial Review and has since been confirmed to AVCJ by a source close to the situation. The source added that the sale process will lead to a full exit for L Catterton.

L Capital Asia, an arm of luxury goods giant LVMH, acquired a 70% stake in Seafolly in 2014 for AUD 70m (then USD 60m). Two years later, L Catterton, a specialist in consumer brands, was established through the merger of L Capital Asia and US-based Catterton, thereby taking ownership of the portfolio company.

Seafolly, which represents about one-third of the Australian women’s swimwear market, struggled during pandemic lockdowns in 2020. This coincided with bushfires disrupting a seasonal sales cycle and a series of ransomware attacks that disrupted deliveries.

The company brought in a new CEO in May 2020 and appointed KordaMentha as administrator the following month, citing a “crippling financial impact.” It continued to trade as normal and immediately began a sales process.

The restructuring process was fruitful, generating significant interest from bidders. In July 2020, creditors chose L Catterton to reacquire the business. The following month, Seafolly agreed to acquire local rival Jet Swimwear, whose parent company PAS Group was also in administration.

Seafolly was lifted from administration shortly thereafter, in time for the Australian summer sales period in 2020. Funding was subsequently provided by Longreach Credit Investors. “The Seafolly administration is one of the clear success stories of restructuring in the midst of COVID-19,” Baker McKenzie said in 2021.

Nevertheless, Seafolly's store footprint has fallen from about 60 to 30 since the pandemic, although the brand is still marketed at thousands of sales points in about 40 countries. The company was said to have lost about AUD 92m during the financial year preceding administration.

L Catterton’s holding period featured several significant expansion efforts, including the opening of five stores in California, bringing the total to seven. Distribution partnerships were also established with US retailers, including Nordstrom and Amazon.

The goal was to transform the company into a global lifestyle brand. In 2017, Seafolly bought Colombian beachwear brand Maaji for a reported AUD 50m. Meanwhile, expansion continued in Southeast Asia through retail stores and partnerships with distributors.

FTI Consulting was appointed last May to oversee the sales process for the current transaction. The buyer is said to be acting via a holding company called Bondi Brands Group, which was recently registered in Hong Kong.

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• Topics
• Australasia
• Consumer
• Trade sale
• Australia
• L Catterton