Sequential Brands Group Inc. is nearing the end of the process for divesting some of its brands after it filed for Chapter 11 bankruptcy protection last month.
According to a source close to the deal, Jessica Simpson and her family are close to completion of a deal to buy back the portion of her namesake brand sold to Sequential in 2015. Jessica and her mother, Tina Simpson, who currently own 37.5% of the brand, are positioned as the stalking horse bidders to buy back the remaining 62.5% of the brand, according to a hearing held last week.
The Simpson brand has been a bright spot among continuous losses at Sequential, which also owns Joe’s Jeans, And1, Avia and more brands. Sequential filed for bankruptcy in late August after “significant debt on its corporate balance sheet” made it no longer able to operate its portfolio. Sequential is looking to sell all or most of its assets in an auction and bidding process that will enable interested buyers to bid on its assets.
According to financial documents, the company had an outstanding net debt of $452.3 million as of Dec. 31, 2020. To pay back lenders, the company shed some of its brands this year. Sequential sold the Ellen Tracy and Caribbean Joe Island Supply Co. brands to the GMA Group for a total of $20 million in August. It also sold its Heelys brand assets to BBC International for $11 million in April, and in July, it divested its 65% interest in DVS Footwear International LLC to Elan Polo International Inc. for $2 million.
According to a Reuters report, Centric Brands LLC, a potential buyer for the Joe’s Jeans line recently raised its offer by 18% to $45 million. Galaxy Universal LLC bid $333 million for Sequential’s activewear brands, which include Avia, SPRI, Gaiam, And1 and Swisstech.
Competing offers must be submitted by interested parties by Oct. 25, with a sale hearing set for Nov. 4.