Summer may be over, but one e-commerce retailer has been enjoying some impressive gains since markets opened. For Naked Brands Group (NASDAQ:NAKD), things are just starting to heat up, even as temperatures across the U.S. begin to cool down. The company’s shareholder meeting was last month, but a follow-up announcement from the chairman and CEO was released this morning. And it has sent NAKD stock shooting up.
What’s Happening With NAKD Stock
At a shareholder meeting on Aug. 20, Chairman and CEO Justin Davis-Rice addressed the company’s recent divestiture of the “bricks-and-mortar operations of Bendon” and discussed its plans to find a partner for a merger or acquisition.
In a recent letter, he announced that after considerable searching, he believed that they had found a “disruptive opportunity in the clean technology sector.”
Although Rice did not name the company, he described it as a “market leader with cutting edge patented proprietary technology” and noted that it satisfied the ESG (environmental, social and governance) mandates to which he had previously eluded.
“We believe the business combination will reward our patient shareholders” he added. That certainly seems to be the case. After a week of only marginal growth, NAKD stock is up over 19% on the day. If it does not drop off, it will mark an impressive culmination to a week in which shares have risen by more than 30% as of this writing.
What It Means
In the week following the shareholder meeting, shares of NAKD stock also shot up. However, throughout the early weeks of September, they were quick to decline. This news points to a future with plenty of opportunity for growth.
Pending further complications, this merger stands to help the company expand its reach into a new sector — and one with plenty of upside. As environmental concerns grow, the need for clean technology, particularly within the area of manufacturing, will only increase. Fashion retailers taking steps to establish themselves within this new market are demonstrating the type of initiative that helps create sustainable growth.
What’s Next for NAKD Stock
To know for sure, we’ll need to learn more about the impending merger. What we do know is that the company’s last two growth spurts have resulted from news of the merger. As we learn more about it, it stands to reason that NAKD stock will continue to react well, assuming no regulatory complications ensue.
Leadership matters, and Rice is correct for prioritizing finding a partner within the clean tech sector. His company already makes popular fashion items, but if they were to introduce more sustainable practices, it could help them gain footing in a market in which few fashion retailers have gained a notable market share.
It’s also worth noting that Naked has garnered meme stock status. Breaking into the sustainable fashion field will likely only increase its popularity within digital investing communities.
More details will unfold within the coming months, and NAKD stock is absolutely worth watching as they do.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.