Even though large companies that have been in existence for years have gathered experience in whatever industry they may be in, including the fashion industry, there are still chances that they can fail. Large companies can fail as a result of wars, recession, poor management decisions, and many more.
As we all know the COVID-19 pandemic affected all the industries in the world, and many fashion brands and labels had to be restructured or lost their assets as a result. The ABG and SPARC groups recently acquired the oldest men’s clothier in the United States, Brooks Brothers. Here is what this means for all the brands involved;
About Brooks Brothers
For over 200 years, Brooks Brothers has been known as the oldest men’s clothier in the United States. The ready-to-wear brand has played a huge role in shaping the fashion course for American style and menswear by providing accessible, affordable, and wearable clothes for the masses.
In July this year, the fashion company filed for bankruptcy protection as the company had been struggling for a while, in addition to the impact of the coronavirus pandemic. According to the company’s spokesperson,
“The current pandemic has accelerated the challenges that the industry and our business have faced for some time.”
After filing for bankruptcy protection, they also sold one of their factories, the Southwick factory in Haverhill, for about 14 million USD. The Brooks Brothers said they had secured 75 million USD in debtor-in-possession financing, and coupled with cash flows from ongoing operations, they would have the liquidity to support the brand through the sale process.
About ABG and SPARC Groups
Authentic Brands Group, popularly known as ABG, is a brand development, marketing, and entertainment company which owns a global portfolio of entertainment, media, and lifestyle brands. Their portfolio, which contains brands like Aeropostale, Nine West, and Forever 21, spans through the fashion, lifestyle, and entertainment sectors amongst others.
SPARC Group is a global enterprise which designs, sources, manufactures, distributes and markets apparel and accessories for men, women, and children. The group delivers product and commerce innovations through a platform that supports over 2000 retail stores.
Implications Of The Acquisition
One of the criteria the owners of the Brook Brothers brand looked out for when selecting owners was that any potential buyer aligns with their core values, culture, and ambition to lead the brand into the future. The ABG and SPARC Group surely ticked all the right boxes for the acquisition to be finalised.
However, what does this mean for all the brands involved?
ABG has purchased the intellectual property of Brooks Brothers and will, therefore, oversee all licensing partnerships, new business, and brand development strategies. And as Jamie Salter, the CEO of ABG shared,
“Brooks Brothers comes at an important time in ABG’s development as we are placing a significant emphasis on growing our retail and e-commerce footprint. We see a great opportunity to strategically expand this powerhouse brand across the globe.”
The SPARC Group, on the other hand, will assume the role of core licensee. What this means is that they will manage the chain’s operations, including retail, wholesale, and e-commerce.
In addition to all of these, both groups will share the responsibility of brand marketing which will be focused mainly on repositioning the Brooks Brothers for a newer generation, by expanding their online presence and collaborations.
Some of the existing stores of Brooks Brothers are to continue running as part of the agreement, while the rest will be shut down.