From Barneys To Topshop, Authentic Brands Looks To Build Retail Empire
Authentic Brands is in talks to snap up U.K. retailers Debenhams and Arcadia but faces stiff … [+] competition. (photo by Mike Kemp/In Pictures via Getty Images)
In Pictures via Getty Images
Authentic Brands is plotting to step in yet again to acquire a failing fashion retailer as the group sets its sights on U.K. strugglers Debenhams and Arcadia.
If it is successful, Authentic Brands Group (ABG) will add the defunct department store chain and flatlining fashion empire to a list of D.O.A. retailers that it has snapped up in a little over a year, including Barneys New York, Forever 21, and Brooks Brothers.
ABG – backed by BlackRock BLK , General Atlantic, Leonard Green & Partners, and Lion Capital – held talks with administrators for both retailers over the weekend and is eyeing a deal to take over the troubled retail groups, with Debenhams currently in administration.
However, U.K. billionaire Mike Ashley’s Frasers Group said on Monday that it was in negotiations to buy Debenhams from administrators in a rescue deal. It is also interested in participating in the sale of Philip Green’s collapsed fashion chain Arcadia Group.
Frasers, formerly Sports Direct, hopes a deal can be agreed and jobs at Debenhams saved after the Covid-19 pandemic sunk its troubled business but cautioned that the transaction was complicated and talks needed to take place quickly.
Administrators for Debenhams said earlier in December it would be wound-down, shuttering all its shops after 242 years in business and putting 12,000 jobs at risk. Green’s Arcadia fashion group collapsed into administration late in November, putting another 13,000 jobs at risk.
Ashley is understood to be chasing to complete the deal to buy Debenhams to help him crack the high-end cosmetics market.
Last week he flew by helicopter to examine the Debenhams warehouse in Peterborough after reportedly eulogizing about the online cosmetics market at a secret meeting in the City of London.
He is believed to have told analysts he wants to emulate online cosmetics star The Hut Group, and Debenhams has more than a million Beauty Club loyalty members.
Fashion Retailers Circle Arcadia Brands
Meanwhile, fashion conglomerate Arcadia continues to trade while potential suitors are sought for some or all of its brands.
It comes as documents seen by The Telegraph showed that administrator Deloitte is running an auction of the various pieces of Sir Philip Green’s Arcadia empire, aiming to raise $247 million.
The process – known as Project Kane – is shrouded in secrecy, with first-round bids for assets expected by Friday. Three of the eight brands – Evans, Miss Selfridge, and Outfit – made sales losses last year, the documents revealed.
Grafitti that reads RIP BARNEYS on the glass window of the former Barneys location on March 30, 2020 … [+] in New York City. (Photo by Bill Tompkins/Getty Images)
Boohoo is seen as another potential buyer, as are Next, Marks & Spencer, private equity houses, and even supermarket retailer Tesco, which house 30 Dorothy Perkins stores.
For its part, earlier this month Authentic Brands Group CEO Jamie Salter confirmed that the company will reopen iconic department store Barneys in the first quarter of 2021 as two boutiques, one inside Saks Fifth Avenue’s Manhattan flagship and one in Greenwich, CT. Barneys 2.0’s premiere was originally scheduled for September, but it was pushed back by Covid-19 delays. There are few details about the merchandise Barneys will carry and how it will continue to trade online.
But ABG is confident that there is an appetite for international spin-offs, plotting expansions into China, Korea, and Europe for Barneys over the next two years. ABG will also announce a “personal care and beauty deal” between Barneys and an undisclosed partner company imminently, Salter said.
ABG Expands Forever 21 In Global Push
ABG relaunched youth fashion brand Forever 21 online in Europe and the U.K. this summer and in October announced a tie-up with AR Holdings to expand its physical and online retailing across Latin America.
Forever 21 has relaunched online in Europe and is to expand in Latin America. (Photo by Drew … [+] Angerer/Getty Images)
Brooks Brothers, which ABG acquired with mall giant Simon Property Group SPG in September, is to pare down its men’s assortment to historically best-selling hero items Oxford shirts and fleece polo shirts. It is also exploring more aggressive online expansion, improved women’s and children’s offerings, and brand collaborations.
One of the main issues for Brooks Brothers is its reliance on more formal apparel and therefore its fortunes are closely tied to when and how employees return to the office in 2021, as vaccinations finally roll out. However, even with a much-reduced threat from Covid-19, there is no guarantee that workers will return to their offices in the numbers or with the frequency of the past.
For Authentic Brands, acquiring Debenhams and Arcadia would be a significant step into the U.K. and see its belief in reviving retailers in critical condition arrive into a European fashion sector still reeling from the impact of the pandemic and a fresh b lockdowns.