The U.S.'s largest shopping mall manager Simon Property Group, Inc. and licensing company Authentic Brands Group LLC have won a bankruptcy court bid to buy denim maker Lucky Brand Jeans for $140.1 million.
Simon Property and Authentic Brands' joint venture Sparc LLC will become Lucky Brand's core licensee and operating partner. The companies said late last week the joint venture would be responsible for Lucky Brand's product design, development and sourcing and overall operations at its North American outlets and its e-commerce business.
When it filed for Chapter 11 bankruptcy protection in July Lucky Brand had about 175 physical stores in North America. The company also sold stock at its outlets at department stores including Macy's. Lucky Brand was one of the first U.S. retailers to fall victim to the economic downturn as a result of forced closings because of the coronavirus pandemic.
Authentic Brands Group will become the new owner of Lucky Brand's intellectual property and its licensing partnerships, it said in a news statement. It will head any new business and brand development. Authentic Brands had purchased a number of troubled retailers before the pandemic hit Western countries. It acquired retailers such as Nine West and Barneys New York Inc.
The new acquisition will bolster its portfolio, Authentic Brands' chief executive officer Jamie Salter said. The company's businesses now generate more than $13 billion in worldwide retail sales annually, Salter said. Lucky Brand complements its existing portfolio because it is popular with younger buyers. Authentic Brands hopes this can unlock new opportunities in its international markets.
Both companies have yet to formally announce their plans for Lucky Brand's existing stores. However, they said they would be negotiating with landlords to keep high-performing stores open in North America. The exact number of stores to remain open is unclear.
Sparc earlier won a bid to purchase bankrupt men's clothing retailer Brooks Brothers. Sparc agreed to pay $325 million and said it would keep most Brooks Brothers' U.S. shops open.
