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Darling Set to Helm Global Brands Group With Clean Slate and Fresh Focus

Global Brands Group on Monday completed the sale of select North American assets to Differential Brands Group for $1.2 billion in a deal that sheds a significant portion of GBG’s North American licensing business.

As part of the agreement, Bruce Rockowitz has stepped down as GBG’s CEO, but will continue to serve as non-executive vice chairman. As its new CEO and executive director, Global Brands appointed industry veteran Rick Darling, who will lead this transition.

“With this very successful and strategic transaction completed, I have decided it is the right time to step down as CEO of Global Brands Group, but will continue to serve on the main board of Global Brands Group and the boards of CAA-GBG, our joint venture with Creative Artists Agency, and Seven Global, our joint venture with David Beckham,” Rockowitz said.

Darling was the former president of LF USA, which was the predecessor of Global Brands Group, and most recently served as executive director for LF Americas, Li & Fung Ltd.’s wholesale and distribution business in the U.S.

“It’s not often that you can have a fresh start with an existing company with a strong foundation and portfolio of brands,” Darling said in an exclusive interview with Sourcing Journal on Tuesday. “We can proudly say that GBG today is a company with no debt on its balance sheet.”

Darling noted GBG will continue to hold various men’s and women’s licensed brands, including Jones New York, Ellen Tracy and Kenneth Cole, while its footwear lines range from Calvin Klein and Kate Spade to Katy Perry and Jennifer Lopez. In addition, GBG has a cadre of kids’ character and entertainment licensed products, including Disney and Marvel, which it now holds only for European distribution.

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Darling said GBG’s diverse brand management division is perhaps the company’s fastest growing unit.

“We decided let’s focus on what we would like to use as our foundation going forward, clear the balance sheet of the debt and allow us to focus on new opportunities,” Darling said.

He said he feels the retail climate in the U.S. is pretty strong, even as some of the players are changing; Europe is more difficult, although GBG’s children’s wear and footwear businesses are doing very well; and Asia and China are seeing real growth.

“I think the real changes are the macro influences,” he said. “The tariff system that’s been put in place creates challenges and we are challenged to become more sensitive to the way you view the business through social media and different mechanisms to reach the consumer. The other thing is that the market itself is changing so quickly that every business model needs to be a lot more nimble. The wholesaler today has to reinvent itself. We’re in a position now with a balance sheet that allows us to take a very objective look and decide where we would like to be two or three years from now.”

William Fung, chairman of Global Brands Group Holding Ltd., reiterated Darling’s sentiment. “The completion of this transaction enables us to realize value for businesses that we have grown to more mature levels and at the same time focusing on areas that we have significant growth potential with improved operational efficiency and reduced working capital needs,” Fung said. “It also gives us the ability to strengthen our balance sheet and to improve value to our shareholders.”

Differential Becomes Centric

Concurrent with the closing of the transaction, Differential Brands Group has changed its name to Centric Brands Inc., reflecting what the company says is its position as a leading lifestyle brands collective platform. Centric Brands will be listed publicly on the NASDAQ under the ticker symbol CTRC, which is expected to be active on or around Thursday. Until then, Centric Brands will continue to trade under the former symbol, DFBG.

Among the assets acquired by Differential/Centric are the North American kids’ and accessories businesses, as well as GBG’s west coast unit, which includes BCBG, Buffalo Jeans and Joe’s Jeans.

Jason Rabin, former president of Global Brands Group North America, will lead Centric Brands as CEO. William Sweedler, managing partner of Tengram Capital Partners, which played a pivotal role in the transaction, will continue to serve as chairman of the board of directors.

Centric’s portfolio of global consumer brands consists of Hudson, a designer and marketer of women’s and men’s premium denim and apparel; Robert Graham, an eclectic apparel and accessories brand; and SWIMS, a Scandinavian lifestyle brand best known for its range of fashion-forward, water-friendly footwear, apparel and accessories. Centric also licenses more than 100 brands across core product categories, including kids’, women’s and men’s accessories and apparel.

“With the closing of the acquisition and structuring of the new Centric Brands platform, we have brought together best-in-class operating capabilities with a strong portfolio of brands across areas of core expertise including kids’ wear, women’s and men’s accessories and apparel,” Sweedler said. “Centric Brands looks forward to building its relationship with Li & Fung and its global sourcing networks. As a proven leader with nearly 25 years of industry experience, Jason will be able to seize the opportunities that lie ahead for Centric Brands in an impactful way that drives growth and creates long-term shareholder value.”

The Centric Brands board will be comprised of independent directors, as well as Rabin and appointees designated by Tengram and GSO Capital Partners. Centric Brands said it anticipates generating more than $2.3 billion in annual revenue with branded product distribution to a diversified base of consumers across all retail and digital channels. The new Centric Brands platform will allow the company to add new licenses and company-owned brands to its portfolio, leveraging its expertise and capabilities to design, produce, manage and market a broad array of products.

“With the unmatched sourcing network of Li & Fung, industry expertise and a large-scale platform, we have the ability to expand organically through brand, category and channel growth, as well as the potential to add brands to our portfolio through new licenses and acquisitions across strategic verticals,” Rabin said in a statement announcing the deal. “I look forward to creating a culture of success at Centric Brands and to continuing to work with the board to capitalize on the market opportunities ahead.”

The company will be headquartered in New York City, with offices in Greensboro, N.C., Los Angeles and Montreal.