The Rise and Fall of Brooks Brothers | WSJ
The company, known as Sparc LLC, which includes US retail space owner Simon Property Group and licensed clothing firm Authentic Brands Group, intends to spend $ 305 million to buy the assets of the bankrupt Brooks Brothers, the court said in a statement..
The proposal, which is still subject to possible rate hikes and court approval, is to keep at least 125 Brooks Brothers stores operating, according to the statement..
A court hearing, which can approve the proposal, has been set for August 3, while other competing proposals are due to be submitted by August 5. Brooks Brothers Final Sale Hearing Set for Aug 11.
Simon Property Group, the largest retail space owner in the United States by number of points of presence, has already teamed up with ABG to provide funding to bring Brooks Brothers through the restructuring process. $ 80 million loan from Sparc LLC was obtained by retailer in a rarely seen in the market transactions without interest and fees.
Brooks Brothers, known for their business suits and button-down polo shirt, filed filed for bankruptcy in court on July 8. In the USA, the company was represented in about 250 locations.
This is certainly not the first time Simon and ABG have worked together. They all strive for it – now through the educated Sparc. With ABG bringing its expertise in manufacturing and licensing, Simon brings expertise in real estate.
ABG and Simon jointly make a $ 191 million bid on the assets of the bankrupt denim manufacturer Lucky Brand, which is still pending court approval.
Before Sparc was formed, ABG and Simon teamed up in 2016 to buy out teenage clothing store Aeropostale and thereby save it from bankruptcy. And, in a deal with mall owner Brookfield Property Partners, they acquired the pre-bankrupt Forever 21 last year..
CNBC reports that America’s largest mall owners are increasingly looking to strike rescue deals with retailers hit hard by the coronavirus pandemic. In many cases, as it turns out, these bankrupt retailers are the main tenants in malls with a lot of stores..
Disruptions in the retail sector have led to the luxury department store chain Neiman Marcus Group, apparel retailer J. Crew Group Inc and J.C. Penney Co Inc filed for bankruptcy protection after failing to restructure their finances success.
Meanwhile, some of the largest retail property owners in the country, such as Simon, are sitting in cash. In a June 29 message to investors, Simon said it had approximately $ 8.5 billion in liquidity on its balance sheet, including approximately $ 3.5 billion in cash on hand. He issued another $ 2 billion in senior secured bonds on July 7..
ABG also operates brands such as Barneys New York, Nautica and Nine West..
Simon shares are down nearly 59% this year. The market capitalization of the company is $ 18.9 billion.