Baby Bunting expands Australasian presence with new Nuna and Bugaboo deals
Baby Bunting (ASX: BBN) has announced the signing of new supply agreements with Nuna Baby Australia and Bugaboo New Zealand as part of its exclusive brand strategy.
The company has entered into a five-year arrangement with baby gear designer Nuna to stock its products until June 2029, with an option for a further five-year extension subject to the achievement of performance targets.
The agreement builds on a business relationship with Nuna – currently the leading pram and car seat brand in North American premium department stores – that began in 2021 and is expected to provide improved margins, a brand development rebate and expanded space fee arrangements.
Bugaboo NZ deal
Baby Bunting has also entered into a three-year exclusivity agreement with Bugaboo, enabling it to retail the company’s products for the first time in the New Zealand market.
Baby Bunting opened its first NZ retail outlet in August 2022 and has since added another three to its stable.
The company has plans to grow its presence in the country with at least another 10 large-format stores.
Competitive advantage
Baby Bunting chief executive officer Mark Teperson said the new agreements would provide the company with a competitive advantage.
“We are delighted to partner with these leading international brands to provide them with a platform for growth in Australia and NZ and to bring innovative products to families in these markets,” he said.
“These deals mark a significant step in enhancing our market presence and delivering superior value to our customers, suppliers and shareholders.”
Profit guidance
Baby Bunting also reaffirmed to the market this week that it expected a proforma net profit after tax for the full year 2024 in the range of $2 million to $4m.
The company said the forecast reflects the benefits of new product assortments, a renewed focus on customer acquisitions, the introduction of a refreshed promotional engagement and a proactive branding and go-to-market campaign.
“We are making good progress in implementing the first phase of our strategic initiatives including the introduction of a simplified pricing strategy, renegotiating supplier trading terms and enabling online fulfilment through all stores, which is strengthening our operating leverage and inventory utilisation,” Mr Teperson said.
“We believe we are well positioned to execute our strategy and are focused on delivering sustainable growth and enhanced shareholder value.”
Baby Bunting also announced it had rolled over its existing debt facility that was due to expire in March 2025 for a further three years on the same terms.