By: AllPennyStocks.com News

Friday, March 1, 2013

Every now and then a headline just grabs the attention of investors. Every company wants to have key words in the title of their press release and generally will devote a fair amount of time just trying to make it catchy, yet informative to capture the essence of the news with the most bang for their buck. It’s really just marketing, but hey, there’s shareholders to please and others to try and attract. Fortunately for Naked Brand Group, Inc. (OTCQB:NAKD), they’ve got an eye-grabber built right in to their headlines (unless they don’t put their name in it, but what sense would that make?). Based in Vancouver, British Columbia, Canada, the company trades only on the U.S. markets as a fully-reporting company in the underwear business.

The company as a public entity on Wednesday was the product of an acquisition of Search By Headlines.com Corp. on July 30, 2012 and then a merger with a created subsidiary late in August. Naked Boxer Brief Clothing Inc. (the original acquisition company) has been a manufacturer and seller of undergarments in Canada since September 2010 and realizing revenue every step of the way.

Digging through SEC filings shows that the company is generating modest sales, and still operating at a loss. Through the first nine months of the last fiscal year, ended October 31, 2012, Naked Brand Group notched $151,502 in revenue, up about 70 percent from $89,025 in the year prior period. Net loss also grew, jumping from $427,585 to $964,073.

The good thing is that the company seems to be expanding its distribution streams and finds itself on the shelves of some popular retailers, including Nordstrom, Inc. (NYSE:JWN) and high-end store Holt Renfrew in Canada. The share structure is also in nice shape, with only 28 million shares outstanding, a condition that many juniors cannot boast while bringing a product to market.

On Wednesday the company said that it has officially changed the name of its operating subsidiary from Naked Boxer Brief Clothing Inc. to Naked Inc. in preparation of launching a new women’s collection of lingerie that is scheduled to debut in major retailers in January 2014. The Naked® brand has been featured on The View, ABC, FOX LA, (ET) Canada and on The Dragons' Den.

"From the moment we launched, women have been requesting us to develop a line for them that uses the same incredible fabrics coupled with the sexiness and comfort that embodies the men's line. We are proud to announce that we are launching our women's collection featuring all of those same qualities," said Joel Primus, president and founder of Naked, in a corporate statement.

The company notes that it sees a great opportunity to utilize its existing distribution channels to tap into an industry that is expected to generate $32 billion in annual sales by 2016. Victoria’s Secret, a popular lingerie retailer under the umbrella of Limited Brands, Inc. (NYSE:LTD), recorded $6.2 billion in sales in 2012.

“What will differentiate Naked-women from other lingerie lines is not only the quality and comfort that is inherent to the brand but the production of a collection that caters to the more sophisticated women who value comfort while still wanting to look sexy,” according to the company today.

The nearly $32 million valuation seems more than fair at the moment, but with the new line and some additional sales streams, that could change. Proper due diligence is, as always, encouraged.

Shares of NAKD are flat on Friday, at $1.16 with no volume so far today but the stock has rallied a bit over the last two weeks of trading.

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