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Universal Store to acquire youth fashion retailer Cheap THRILLS Cycles in $50 million deal

Shares in Universal Store have lifted amid a bloodbath on the ASX after the company announced it would acquire youth fashion retailer, designer and wholesaler Cheap THRILLS Cycles in a $50 million deal.

Consideration will consist of $17.5m in cash, $17.5m in Universal Store shares and $15m in deferred variable consideration.

The initial cash consideration and acquisition costs will be funded from existing cash reserves of Universal Store.

The transaction is expected to complete in the fourth quarter of this year subject to the satisfaction of certain conditions.

Universal Store said in a statement that CTC was an attractive business with a strong growth profile and exciting prospects, and would help expand the company’s portfolio of premium youth fashion brands.

“THRILLS is currently the highest selling third party brand in our Universal Store business and has been a consistent and growing part of our product offer for over eight years,” Universal Store chief executive Alice Barbery said.

CTC hast a fast-growing retail channel with eight stores across Australia, and two further stores to open by the end of November.

Sales to Universal Store represent around 26 per cent of CTC’s business, while the sale of CTC’s products represents around 9 per cent of Universal Store’s 2022 financial year sales.

CTC — which has a strong focus on sustainable fashion — generated sales of $34.6m in the 2022 financial year.

Shares in Universal Store closed up 2.57 per cent to $4.79.

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