NEW YORK — NexCen Brands Inc. provided a business update, including a review of 2008 operating activities and information on the status of its efforts to complete and file its delinquent quarterly and annual reports. Additionally, the company outlined its key strategic initiatives for 2009.
Review of 2008 activities
The company plans to file its complete financial results by March 31 and has outlined a number of strageties to strenghten its brands.
"While NexCen faced a number of challenges in 2008, we took the opportunity to make significant changes to our business strategy and to take steps to improve our operations," said Kenneth J. Hall, CEO of NexCen Brands.
The strategies include:
- Restructuring its debt and divesting its licensing business in the home and luxury sectors
- Reducing its expense structure to be more closely aligned with the underlying revenues of the business
- Improving its corporate infrastructure
2008 Highlights:
- In the fourth quarter of 2008, NexCen completed the sale of its Waverly and Bill Blass businesses. The divestitures allowed the company to reduce its debt by approximately $33.4 million, or 19 percent, as of the end of 2008.
- NexCen restructured both the company's credit facility and operations, and anticipates a meaningful reduction in interest expense this year based on the company's reduced debt level, the recent amendment to its credit facility, and the low variable rates currently applicable to other portions of its debt. Overall, from May 2008 through year-end, the company reduced recurring operating expenses by more than 35 percent.
- The company made significant changes to its executive leadership and management structure and enhanced corporate governance.
- In 2008, the company opened 97 franchised quick-service restaurants and 67 franchised retail stores, and signed agreements to enter new markets such as Kuwait, Lebanon, Bahrain, Guam and Vietnam. NexCen also continued a re-branding campaign for The Athlete's Foot; established an online cookie cake ordering program at Great American Cookies; introduced new packaging for pints and quarts at MaggieMoo's; launched a new in-store presentation with a new menu board program at Marble Slab; gained the first significant national media coverage for Pretzelmaker and Pretzel Time; and opened its first international Shoebox New York franchised store.
The company announced that it anticipates being able to file an amended Annual Report on Form 10-K, which will include a restatement of its 2007 financial results, as well as its 2008 quarterly and annual reports, with the Securities and Exchange Commission (SEC) by March 31.
2009 strategy
In 2009, the company said it will launch several intitiatives designed to strenthen each brand.
The initiatives include:
- Integrate Pretzel Time and Pretzelmaker, thus creating the second largest pretzel brand in the United States by market share
- Reduce product SKU count at MaggieMoo's to increase franchisee profitability
- Execute a rebranding and remodeling program for Marble Slab stores to strengthen the Marble Slab brand
- Create a new branding plan to update the look and feel of the Great American Cookies brand
Additionally, NexCen plans to gain franchisee alignment by leveraging its NexCen "University" franchising platform — a centralized training, research, development and operations center in Norcross, Ga. In doing so, the company will continue to build on the expertise of the management team and franchise system as well as state-of-the-art tools and technology to train franchisees in every aspect of owning and operating a NexCen franchised store.
