ABG, Simon Property in $305m 'stalking horse' deal for Brooks Brothers
Jul 24, 2020
Brooks Brothers has taken a step closer to being under new ownership with the failed American heritage retailer late on Thursday revealing that Authentic Brands Group (ABG) and malls giant Simon Property Group have it in their sights with a $300 million+ bid and plans to save “at least” 125 stores.
America’s oldest apparel company said it had filed a motion in the United States Bankruptcy Court for the District of Delaware to obtain court approval of an asset purchase agreement with ABG/Simon’s Sparc Group LLC as stalking horse bidder.
Under the terms of the agreement, Sparc intends to buy “substantially all the company’s global business operations as a going concern” for $305 million. It has also committed to acquiring at least 125 Brooks Brothers retail locations.
The retailer previously operated 200 stores across North America and 500 worldwide in 45 countries although there are no details yet on plans for its wider operations.
With Brooks Brothers having filed for Chapter 11 bankruptcy protection earlier this month, the agreement is subject to court approval and that means it could still be derailed by “any higher or better offers as part of the company’s ongoing auction process,” even though Sparc had already provided Brooks Brothers with substantial financing. The decline for other offers is expected to be August 5.
At least two other major consortiums are known to be keen to buy the brand.
So what is Sparc? Also aiming to take over Lucky Brand’s assets, it describes itself as a “full-service retail operator with a multi-brand platform that supports over 2,600 retail stores and shop-in-shops, a robust e-commerce platform, and leading wholesale accounts in North America, South America, Europe, and Asia Pacific”.
It’s the “dedicated operating partner” for ABG’s Aéropostale and Nautica brands, and “supports over $2.7 billion in global retail sales annually”.
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