Could ABG Snap Up Bankrupt Ann Taylor Parent?

Authentic Brands Group could be throwing its hat in the ring for the recently bankrupted Ascena Retail Group.

The brand management company is among the parties said to be considering a buyout of the Ann Taylor, Loft and Lane Bryant parent, which filed for Chapter 11 protection on Thursday. According to Bloomberg, ABG would make the investment alongside frequent buying partners Simon Property Group and Brookfield Property Partners. Private equity firm Sycamore Partners is also reportedly mulling the purchase.

Over the past couple months, ABG has emerged as a big player in retail mergers and acquisitions as the coronavirus pandemic accelerates brick-and-mortar’s challenges and drives consumers online.

On Friday, bankrupt Brooks Brothers announced that SPARC Group LLC — a venture created by the ABG and Simon — made a stalking-horse bid of $305 million to snap up its global business operations as a going concern. The group also plans to preserve at least 125 of its stores.

ABG and Simon had previously joined forces — along with mall owner General Growth Properties, now owned by Brookfield — to save Aéropostale from liquidation in 2016. The two, plus Brookfield, also became the new owners of teen mall staple Forever 21 in February.

What’s more, rumors surfaced last month surrounding ABG’s potential acquisition of JCPenney, which went bankrupt in mid-May: Days after news emerged that Sycamore was debating buying the department store chain, a Bloomberg report suggested that ABG could join forces once again with Simon and Brookfield to pull JCPenney out of bankruptcy. The beleaguered retailer is currently undergoing reorganization and expects to close 242 doors, or about 29% of its fleet, by February 2021.

In its bankruptcy filing, Ascena — which also owns the Lou & Grey and Justice brands — wrote that it reached a restructuring agreement with 68% of its secured term lenders and received $150 million in new funds from its existing lenders. It intends to eliminate about $1 billion of its roughly $12.5 billion debt load.

As part of the restructuring, the conglomerate plans to shutter all stores in Canada, Puerto Rico and Mexico, as well as all units under its Catherines banner. The group said it plans to sell Catherines’ intellectual property and e-commerce business to a City Chic subsidiary. In addition, it will shut down a “significant” number of Justice locations and a “select” number of Ann Taylor, Loft, Lane Bryant and Lou & Grey outposts.

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