A.k.a. Brands received a notice from the New York Stock Exchange on April 12 notifying the company that it was not in compliance with the requirement that its common stock be at a closing price of at least $1 over a 30-day trading period. At the time of publication, the company’s stock was trading at about $0.40.
The company — which owns brands such as Princess Polly and Culture Kings — said in a press release Tuesday that it plans to inform the NYSE of its plans to remedy the issue, which could include a reverse stock split. A.k.a Brands has six months to regain compliance.
A.k.a. Brands also announced preliminary unaudited first-quarter earnings results. The company expects to report on May 10 that Q1 net sales reached about $120 million with a net loss between $9.6 million and $9.7 million. A.k.a Brands had originally projected net sales in Q1 would be between $113 million and $116 million.
“I’m proud of our solid performance in the first quarter of 2023, which exceeded our expectations on both the top line and on an Adjusted EBITDA basis,” Ciarán Long, interim chief executive officer and chief financial officer of A.k.a. Brands, said in a statement. “I’m pleased with the strength of our brands and our disciplined execution during the quarter. We remain laser-focused on balancing growth and profitability, and we are confident that our growth strategies, flexible operating model and talented teams will drive profitable growth.”
Long was appointed CFO in 2021, and took on the interim chief executive officer role on March 9 this year. On March 6, the company’s CEO at the time, Jill Ramsey, decided to step away from the position to work through unforeseen medical issues. Ramsey remains employed by A.k.a. Brands and is a member of the board.
A.k.a. Brands landed on Retail Dive’s bankruptcy watchlist for digitally native brands in March, showing that the company had a 9.99% to 50% chance of bankruptcy at the time.
Expanding its reach, the company’s Princess Polly brand entered wholesale for the first time in March through a partnership with Pacsun. A selection of Princess Polly’s best-selling products is available at 15 Pacsun locations and a wider assortment is shippable on the retailer’s website.