Scotch & Soda Acquired by Bluestar Alliance
Bluestar Alliance, a New York-based brand management company, said Monday it has acquired Scotch & Soda, the Amsterdam-based men’s and women’s lifestyle brand.
Terms of the deal weren’t disclosed. The transaction is subject to customary closing conditions.
Scotch & Soda operates 253 freestanding stores across Europe, North America, Asia, the Middle East, Africa and Australia, and is carried in 7,000 retailers worldwide and online. The company makes womenswear, menswear, kidswear, denim, eyewear, fragrances, and accessories.
Scotch & Soda filed for bankruptcy earlier this month in its home country of the Netherlands, citing “severe cash flow issues” due to a domino effect of the pandemic, war in Ukraine and inflation, as reported.
The acquisition by Bluestar Alliance, whose brands include Hurley, Bebe and Tahari, among others, will allow for the continuation of the brand and its products across key markets, including the Netherlands.
Bluestar has current retail sales exceeding $6 billion, and manages a portfolio of over 300 licenses and a retail platform of over 100 stores worldwide.
Joseph Gabbay, CEO of Bluestar, said, “Bluestar continues to strategically build its portfolio and we see Scotch & Soda as a unique fit, widely known for its roots in Amsterdam and celebrating self-expression with a modern twist on timeless fashion pieces.”
Ralph Gindi, Bluestar’s chief operating officer, added, “Scotch & Soda is a chic, contemporary lifestyle brand which embodies the free spirit of Amsterdam and is uniquely recognized by consumers everywhere in the world. The niche brand sits on its own and attracts a younger fashion-conscious consumer who appreciates fine craftsmanship and attention to detail.”
Gindi added, “Our goal is to continue Scotch & Soda’s luxury retail distribution strategy, while also introducing the brand to more trendsetters, especially those looking to express their personality through their clothing.”
Following the closing of the transaction, which is expected to take place in coming weeks, Scotch & Soda will be enabled to continue its activities in selected markets.
Japser Berkenbosch, attorney at Jones Day and trustee of the bankruptcy entities, said, “We are happy that we were able to make this announcement following the bankruptcy. We have seen quite some interest from parties to acquire some of the bankrupt entities. The proposal of Bluestar Alliance was by far the best deal for all stakeholders involved.”
Erik Schuurs, co-trustee, added, “This is good news for quite a large group of employees at Scotch & Soda, even if, unfortunately, not all employees can be kept on board. Scotch & Soda is a great brand, and I’m glad to see that it can prosper under the management of a company with a great track record.”
As reported last week, managing director Frederik Lukoff decided to step down following the bankruptcy filing, announced March 20, and not continue with the new owners. Berkenbosch was appointed to replace Scotch & Soda’s board in the management of the bankruptcy in the Netherlands. He had joined the company in 2019 after a decade as president of Stella McCartney.
Scotch & Soda generated record revenues of 342.5 million euros for the 2022 fiscal year, but said the previous two years of pandemic restrictions “affected its business performance and financial health negatively.” Store closures in the Netherlands over the holiday period of December 2021 and January 2022 were “particularly damaging,” it said. The war in the Ukraine and the subsequent energy crisis also became obstacles.
Scotch & Soda said it had been struggling since June 2022, and private equity investor Sun European Partners, which took a stake in the label in 2011, was no longer willing to prop up the company with additional cash. After months of seeking additional financing, Scotch & Soda brought in consultants Teneo earlier this year to find a buyer.
Last December, Scotch & Soda said it signed a licensing agreement with Bos Group to take over its footwear design, production and distribution.
Outside of the Netherlands, Scotch & Soda has been expanding rapidly, opening 36 new stores around the world in 2022, including flagships in London and Milan, and in U.S. markets such as Washington, D.C., Detroit, San Antonio, Texas, and Scottsdale, Arizona. The openings brought its North American total to 50, with 46 stores in the U.S. and four in Canada.
The brand opened its first store in China in December, 2021 and rolled out four additional stores, including Beijing and Shanghai in 2022.
This story was reported by WWD and originally appeared on WWD.com.
