Noni B Group is buying Specialty Fashion Group's Katies, Millers, Crossroads, Autograph and Rivers clothing chains for $31 million.
Specialty will remain listed on the Australian share market and will retain the plus-size women's apparel chain City Chic.
Noni B, which owns an eponymous chain as well as Rockmans, W.Lane and BeMe, says it will become one of the largest specialty women's apparel retailers in Australia.
The acquisition will boost its network to more than 1,350 stores across nine brands.
The sale comes after a potential takeover of Specialty by an investment company controlled by the Qatari royal family fell over in 2017.
Specialty fell deeper into the red in 2016/17 with an $8.4 million loss.
The group has blamed aggressive discounting in the sector for an ongoing sales slump for Millers, Crossroads and Katies.
The Specialty assets incurred earnings losses of $6.2 million for the 2017 calendar year and Noni B management expects further losses from the businesses in the 2018 full-year result.
Noni B Group chief executive Scott Evans said the businesses were underperforming "for a number of reasons".
"We believe our disciplined approach to costs of doing business, combined with our customer focus, will ensure a successful turnaround," he said.
He said Noni B expects it will be able to find savings and efficiencies that will result in the acquired portfolio of brands breaking even on an earnings basis in the 2019 full-year result.
The embattled group has been without a CEO since Gary Perlstein stepped down in November after 14 years at the helm and at which point Specialty launched a structural review.
Specialty chair Anne McDonald said the directors unanimously agreed that retaining City Chic, the group's growth business, and selling the other brands was the best plan.
Noni B shares are in a trading halt pending a capital raising while Specialty Fashion shares were up 18 cents, or 47.4 per cent, at 1112 AEST.
