In November, Authentic Brands Group made headlines for its takeover of the bankrupted Barneys New York. Less than 10 months later — and amid the coronavirus pandemic, no less — the company snapped up another three nationwide chains: fast-fashion giant Forever 21, denim purveyor Lucky Brand and storied menswear clothier Brooks Brothers.
It marked the latest in a decade-long acquisition spree for the brand management firm, whose value went from $250 million in 2010 to about $14 billion today. As the COVID-19 health crisis continues to put pressure on the fashion and footwear sectors, ABG has been steady in building its retail empire, and it doesn’t appear to be slowing down any time soon.
In the months of late March and April, scores of retailers were forced to temporarily shutter their stores across the country per government-mandated restrictions on nonessential businesses. Many of them furloughed or laid off scores of workers, slashed executive pay, drew down funds from their revolving credit lines and announced plans to trim their brick-and-mortar fleets in an effort to stay alive. Some — including Ann Taylor and Loft parent Ascena Retail Group, as well as department store chain JCPenney — were plunged into bankruptcy due to longtime financial struggles that were only exacerbated by the pandemic.
Now, ABG has emerged again as a possible retail savior for those two bankrupt companies, as rumors continue to swirl over its potential buyout of the aforementioned chains.
At the end of July, reports suggested that ABG was mulling an investment in Ascena, alongside its frequent buying partners Simon Property Group and Brookfield Property Partners. The news came a month after a Bloomberg story, citing people familiar with the matter, suggested that ABG — also in tandem with the mall giants — was throwing its hat into the ring for JCPenney.
Should those moves transpire, ABG would effectively come full circle: The retail and entertainment powerhouse had previously joined forces with Simon and General Growth Properties, now owned by Brookfield Property Partners, to save Aéropostale from liquidation in 2016. ABG, Simon and Brookfield also became the new owners of teen mall staple Forever 21 in February. Separately, SPARC Group — a venture created by ABG and Simon — acquired Lucky Brand in mid-August and completed the purchase of Brooks Brothers early this month. In between the years of 2017 to 2019, ABG also bought the intellectual property and/or marketing and licensing functions of Frye, Nautica, Nine West, Camuto Group, Volcom and Sports Illustrated.
“Our goal is to be a $30 billion company within the next five years,” ABG founder and CEO Jamie Salter told FN last September. “Our organic growth is somewhere between 5% and 10% a year. So if you do the math, we’re going to be buying lots of companies.” And as the current health crisis continues to push retailers to the brink, the brand management firm — with a portfolio now spanning 50 brands and 6,000 stores — is likely to find more buying opportunities ahead.
