Jessica Simpson has regained 100 percent control of her brand.
With You Inc., the venture between Simpson and bankrupt Sequential Brands Group Inc., had previously signed a stalking horse agreement last month for the purchase of the business that Simpson didn’t already own. The offer was $65 million to acquire Sequential’s 62.5 percent interest in the joint venture, subject to better offers at auction. Simpson was the minority stakeholder with a 37.5 percent interest in the venture.
That offer paved the way for a cancellation of a bankruptcy court auction for the Jessica Simpson Collection, leaving Simpson as the winning bidder.
A sale hearing is set for Thursday. Once court approval is given, closing of the sale could take place within days.
Of all the brands that were under Sequential’s portfolio, the Jessica Simpson Collection was considered its most successful, and is believed to have generated $1 billion annually prior to the Covid pandemic.
Rumblings of Sequential’s struggles under a high debt load had been circulating for some time, and Simpson was said to be contemplating a buy back of her company since this summer.
Sequential began selling assets in 2019, when it unloaded its Martha Stewart Living Omnimedia and Emeril Lagasse brands to rival brand management firm Marquee Brands. Although Sequential garnered $175 million from the sale, it was still struggling under its high debt load. By December 2020, the company had put itself up for sale. Adding to its financial pressures, Sequential was also the subject of a Securities and Exchange Commission lawsuit.
Much of Sequential’s debt load was due to the high prices it paid for the acquisition of brands over the years. One example is the yoga nameplate Gaiam, which the brand management firm acquired in May 2016 for $146 million in cash. Gaiam became part of the firm’s active group, anchored by its And1 and Avia footwear brands. The three brands, along with SPRI and Tony Hawk, were sold as a group to Galaxy Universal for $330 million. The deal, still subject to bankruptcy court approval, is expected to close in mid-November.
According to bankruptcy court records, WRBH Brands Group is awaiting court approval on its purchase of the assets of William Rast, the denim and sportswear brand founded by Justin Timberlake and Trace Ayala in 2005. The sales agreement indicates a $1 million purchase price payable in installments.
The remaining brand under Sequential’s umbrella is Joe’s Jeans, which has been sold to Centric Brands, the parent of the Zac Posen brands, for $42 million, or $38.25 million plus an earnout over a five-year period.
Sequential filed its Chapter 11 bankruptcy court petition on Aug. 31 in a Delaware bankruptcy court.