Bankrupt Lucky Brand Dungarees LLC has found a new owner.
Last night, Authentic Brands Group LLC and mall giant Simon Property Group Inc. — in a venture known as SPARC Group LLC — announced that they were set to become the core licensee and operating partner for the denim maker. A judge in the United States Bankruptcy Court in the District of Delaware on Wednesday approved the purchase, which was worth $140.1 million in cash and other components.
Through their partnership, ABG and Simon will oversee all of Lucky Brand’s sourcing, product design and product development, as well as operate its entire fleet of brick-and-mortar stores and e-commerce business. The group aims to work with the brand’s landlords to keep key North America stores — of which it currently has more than 175 — open. It also seeks to further drive distribution across e-commerce, department stores and other marketplaces in the region, plus Latin America, Europe and Asia. (Its wares can be found in chains like Macy’s and Nordstrom.)
“We are pleased to welcome this iconic heritage denim brand to ABG,” ABG founder, chairman and CEO Jamie Salter said in a statement. “Lucky Brand’s DNA resonates strongly with today’s youth, and we see tremendous opportunity to unlock its value in key territories around the world. With ABG’s social media expertise and content development capabilities, we are ready to hit the ground running and expand quickly into new categories and markets.” (According to Salter, the acquisition would boost the value of ABG’s portfolio to more than $13 billion in annual global retail sales.)
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Lucky Brand went bankrupt in early July due to a heavy debt burden caused by recent challenges stemming from the coronavirus pandemic. At the time, interim CEO Matthew Kaness said that filing for Chapter 11 protection was the “best course of action to optimize the operations and secure the brand’s long-term success.”
The court approval of Lucky Brand’s sale came the same day that ABG and America’s largest mall owner emerged as the winning bidders in bankrupt Brooks Brothers’ competitive sale process. SPARC had increased its offer to $325 million for the “vast majority” of the menswear retailer’s global business operations as a going concern, as well as its intellectual property portfolio. As part of the agreement, the group plans to preserve the Brooks Brothers brand and continue operating at least 125 of the chain’s stores.