Frederick’s of Hollywood has ended the open call for bidders on its business—the Los Angeles-based lingerie retailer canceled an auction of the company Wednesday as no qualified bidders challenged the $22.5 million offer Authentic Brands Group put on the table in April.
The move likely puts the company in Authentic Brands’ hands, according to the Wall Street Journal.
Frederick’s filed for Chapter 11 in April and closed its remaining physical stores in preparation for the filing and added a note on it’s website telling shoppers it no longer had store locations, but that its online offering could provide the same selections.
The retailer cited struggles in the face of stiff competition, diminishing mall traffic and less disposable income among its target market as reasons for its failing. Citing an IBIS World report, WSJ drew comparison’s between floundering Frederick’s and lingerie leader Victoria’s Secret, noting that where Frederick’s accounted for less than 1 percent of the $13 billion U.S. lingerie market in 2014, Victoria’s Secret claimed 41.3%.
As part of its offer, Authentic Brands, which owns brands including Jones New York, Juicy Couture and Palm Beach, and retains intellectual property rights for entertainment icons like Marilyn Monroe and Michael Jackson, would continue to operate Frederick’s as an e-commerce company.
U.S. bankruptcy judge Kevin Gross approved protections for Authentic Brands earlier this month, which included a $775,000 termination fee and a $300,000 expense reimbursement provided it lost at auction, but competition never presented itself.
Frederick’s said in its bankruptcy filing that it had roughly $36.5 million in assets, $106 million in liabilities. The company is carrying secured loans totaling $33 million, $16.2 million in unsecured promissory note, and it estimates any trade debts and landlord liabilities amount to $56.7 million.
A hearing is scheduled for June 3 for Judge Gross to review the sale.