UPDATE: December 22, 2021: On Wednesday, the U.S. Bankruptcy Court of the Southern District of New York is set to give the final approval to SLC Fashion, backed by Sean Combs' company Combs Enterprises, to purchase the Sean John brand for $7.6 million, according to court documents. The price is more than twice the amount of the stalking horse bid earlier this month.
"I launched Sean John in 1998 with a vision to build a premium brand that shattered tradition and introduced Hip Hop to high-fashion on a global scale," Combs said in an emailed statement. "Seeing how streetwear has evolved to rewrite the rules of fashion and impact culture across categories, I’m excited to reclaim ownership of the brand and I’m ready to build a team of visionary designers and global partners to write the next chapter of Sean John’s legacy."
Dive Brief:
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Sean John, the apparel brand founded by musical artist, record producer and entrepreneur Sean Combs, filed for Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court of the Southern District of New York.
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The filing adds the streetwear label to bankruptcy proceedings that have been ongoing since parent company GBG USA (a subsidiary of Global Brands Group Holding Limited) itself filed in July.
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Combs himself is said to be interested in buying back his brand, Bloomberg reports. Sean John already has a stalking horse bid of $3.3 million that sets the stage for an auction to be held Dec. 17, per court filings.
Dive Insight:
This summer's bankruptcy filing was not GBG's first trip to New York's Southern District Court this year — Combs dragged Sean John owner GBG there in February over licensing disputes, including "unlawfully trading off of his name, image, likeness, and persona, without his approval, permission, or consent, and to recover the damages for the injuries they have caused him."
Of course, licensing is the bread and butter of brand conglomerates like GBG, which is only the latest in the space to falter recently. Iconix this summer unloaded a pile of debt by selling itself to private equity and Sequential Brands went into bankruptcy. Another brand aggregator, Bluestem Brands, filed for bankruptcy in 2020.
The distress comes despite these companies' purported advantages, mainly their ability to leverage valuable intellectual property and other assets with little risk from holding inventory, manufacturing products or running retail operations.
Authentic Brands Group appears to be an outlier, having attracted enough capital from new investors to delay plans for an initial public offering, originally slated for this year. Still, Authentic Brands inked that deal with a fair amount of debt, and its expansion spree includes what some analysts see as questionable acquisitions. In its Sparc partnership with Simon Property Group, for example, Authentic Brands has taken over J.C. Penney, Forever 21 and Brooks Brothers.
Editor's note: This story has been updated to include Sean Combs' statement on the reacquisition of Sean John.
