Simon and Authentic Brands Bid $305M to Acquire Bankrupt Brooks Brothers

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Mall owner Simon Property Group and brand management company Authentic Brands Group (ABG) bid to acquire bankrupt Brooks Brothers for $305 million, the retailer announced last night.

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The stalking-horse bid — meaning it sets the base price for the retailer in an auction — was filed by Sparc LLC (owned by Simon and ABG) and would keep at least 125 of Brooks Brothers’ 200 stores open, according to Brooks Brothers. A hearing for the bid is set for Aug. 3, with a deadline for competing offers due by Aug. 5, and one to approve the sale scheduled for Aug. 11.

ABG rival WHP Global is also preparing to submit a bid to pick up the storied menswear retailer, CNBC reported.

Spokespeople for ABG and Simon did not immediately respond to requests for comment.

Brooks Brothers would not be the first time Simon and ABG partnered to buy a struggling retailer. The pair previously bought Nautica, Aèropostale and most recently partnered with Brookfield Property Partners to buy Forever 21 in February. 

Simon and ABG also put a stalking-horse bid for bankrupt jean purveyor Lucky Brand for $191 million, according to CNBC.

The nearly 200-year-old Brooks Brothers filed for bankruptcy earlier this month, with plans to seek a new buyer during the proceedings. The company listed both its assets and liabilities as between $500 million to $1 billion, according to court records.

Brooks Brothers secured $75 million in financing from WHP to continue operation and already started to close 51 of U.S. stores because of the coronavirus pandemic. It also plans to stop manufacturing at its factories in Massachusetts, North Carolina and New York by Aug. 15.

The company was founded in 1818 and dressed everybody from Wall Street workers to 40 U.S. presidents, including Abraham Lincoln, according to Brooks Brothers’ website.

However, it has struggled in recent years as office workers started to dress more casually, and owner Claudio Del Vecchio started to look for a buyer last year.

Brooks Brothers’ fate got much worse during COVID-19 — which forced workers out of the office and into their homes, ditching suits in the process — and it has been crawling toward a bankruptcy filing for months, the New York Times reported.

Retail has been battered by the coronavirus pandemic, with dozens of brands filing for bankruptcy in recent months including J.Crew, Neiman Marcus, JCPenney, Aldo and True Religion.

Ascena Retail Group — the parent company of Ann Taylor, Loft and Lane Bryant — became the latest casualty yesterday, filing for bankruptcy with plans to close 1,100 stores.