Music inspired fashion retailer EBTM is selling its Lowlife brand back to its former owner.
The disposal will help EBTM meet profit expectations of £1.84m in the year to April 2009.
The online retailer will retain the perpetual UK distribution rights to the brand on what it calls “favourable commercial terms”. The Lowlife brand is focused on belts and accessories. In effect, EBTM is retaining the use of the brand for its own online retail site but ditching the wholesale side. Troubles on the high street have hit the wholesale business whose revenues are below expectations.
EBTM believes that offloading the Lowlife brand will help it restructure its wholesale business and make annualised savings of £600,000. That will make up for the lower revenues.
The buyer is Plus Brands, which is owned by Dale Masters. It will pay £200,000 and up to £100,000 in deferred consideration depending on global sales revenues reaching £1m in 2009. Sales have to be more than £500,000 to trigger any further payment.
The Lowlife business, a wholesaler of music inspired clothing, belts and accessories, was acquired in May 2007 for £4.75m in cash and shares. Lowlife brought with it an in-house design and sourcing team with manufacturing links in China and Turkey. It has its own operations in the UK, Spain and France and distributors elsewhere in Europe. It also has licensees in North America.
Masters and his wife own 8.1% of EBTM and they will be locked-in for 12 months.
At 1.625p a share, EBTM is valued at £4.37m.
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