Shares of Naked Brand Group (NAKD) jumped on Friday after the swimwear and intimate apparel maker announced the final tallies from its shareholder meeting. As of 11:55 a.m. EDT today, the stock's price was up more than 14%.
Naked's shareholders voted to approve the sale of its Bendon subsidiary. The vote paved the way for the company to complete its transition to a fully e-commerce-based business.
Naked wasted little time in offloading its money-losing brick-and-mortar operations. It closed its previously announced divestiture agreement with a group that includes members of its management team, like CEO Justin Davis-Rice. The terms of the deal give Naked a share of any net profits Bendon earns over the next three years.
Naked will now turn its attention to growing its Frederick's of Hollywood online business. Management said it will also be on the hunt for mergers and acquisitions (M&As) that can complement its existing operations.
"We have a strong balance sheet, no debt, and an asset-light operating model, and we see a very favorable M&A environment in e-commerce businesses around the globe," Davis-Rice said in a press release.
Naked is one of the stocks that have become popular among traders on Reddit and other social media sites in recent months. Management used the trading frenzy and temporary surge in Naked's stock price to conduct a series of share offerings. The capital it raised from these stock sales allowed the company to pay off its debt and amass roughly $270 million in cash reserves.
This, combined with the divestiture of its unprofitable Bendon retail business, places Naked Brand Group in a much stronger financial position.