UPDATE: July 5, 2018: On July 3 Authentic Brands Group said in a press release that it had completed the acquisition of the Nine West and Bandolino brands from Nine West. ABG CEO Jamie Salter said in a statement that the brand development company has "received an outpouring of interest from retailers, distributors and new licensing partners" around the acquired brands. ABG plans to "enhance the brands' relevance through refreshed creative, engaging digital campaigns and key influencer partnerships," the company said. ABG also plans to expand both the Nine West and Bandolino brands into new categories, including sportswear, outerwear, swimwear, intimates, fragrance, sleepwear and home.
- Nine West sold its namesake and Bandolino brands to Authentic Brands Group for more than $340 million at a bankruptcy auction, the fashion retailer and wholesaler said in a press release Monday. A hearing to approve the sale is scheduled for June 18 in in federal bankruptcy court and the parties expect to close the sale by July 15.
- The bid was $140 million more than the stalking horse bid by ABG going into the auction, Nine West said. Nine West CEO Ralph Schipani said his company is now focused reorganizing its remaining business, which includes the Anne Klein, Gloria Vanderbilt, One Jeanswear Group, Kasper Group and The Jewelry Group brands.
- ABG, which owns a host of celebrity and lifestyle brands, said it will take over the licensing and marketing for the Nine West and Bandolino brands and has appointed Marc Fisher Footwear to operate the footwear and handbag categories purchased in the acquisition. ABG Chief Marketing Officer Nick Woodhouse said the sale brings ABG's total brand portfolio to $8 billion in value. According to Reuters, the brand company beat out shoe retailer DSW at auction for the Nine West brands.
The sale of the Nine West and Bandolino brands to ABG comes as no surprise. When Nine West filed for Chapter 11 in April, the company said it planned to sell the brands to ABG in bankruptcy to help pay off Nine West's $1.5 billion in debt. The ultimate price tag, driven up by DSW's involvement in the auction, may however come as a pleasant surprise to Nine West.
As Debtwire legal analyst Joshua Friedman pointed out in an interview with Retail Dive, the $340 million bid from ABG was "significantly higher" than the brand company's stalking horse bid, which effectively set the floor for the auction. "This is the way a debtor wants this sale to go," with multiple bidders pushing the price up based on the value they see in the operating assets, Friedman said. "You can look a little bit back to Payless, to see what kind of retailers have runway for the future."
Payless went through Chapter 11 last year, closing hundreds of stores and shedding millions of debt before emerging from bankruptcy a few months later. Many analysts saw underlying value in the discount shoe retailer, despite the bankruptcy and even in a fiercely competitive retail world, given Payless' exclusive products, geographic spread and price points. The bidding for Nine West signals that the market sees lasting cache for Nine West in the market, as Friedman pointed out.
As suitors fight over Nine West's brands, its creditors are fighting over how proceeds from the sales and company reorganization will be sliced up. Unsecured lenders to Nine West are pressing ahead with an investigation into private equity firm Sycamore Partners' acquisition of Nine West in a $2.2 billion leveraged buyout of the Jones Group in 2014. The creditors have asked for and received court approval to depose corporate officials involved with the transaction and other players that may have information regarding any possible instances of self-dealing or fraudulent conveyance, or other breaches, related to the acquisition, according to court documents.
Friedman said the creditors' investigation is common for bankruptcy cases, where unsecured creditors have little else for leverage, though he noted that such investigations and any subsequent lawsuits rarely make it all the way to a court ruling. More often they end in settlement. "The goal is ultimately to … increase their own recoveries," Friedman said of the lender group.