In a transaction expected to close by the end of March, the men’s wear firm will use the proceeds to pay down debt and strengthen its balance sheet. The parties separately entered into a separate licensing agreement that allows Tailored Brands to retain the exclusive right to sell and rent products bearing the Joseph Abboud brand name in certain apparel and accessories categories in both the U.S. and Canada. WHP plans to develop the brand through international and category expansion.
“The Joseph Abboud brand has played and will continue to play an important role in the assortment at our retail brands and we look forward to our new partnership with WHP and to the next phase of our relationship with the designer Joseph Abboud,” Dinesh Lathi, Tailored Brands president and CEO, said.
Abboud, the designer, will leave Tailored Brands at the end of January to pursue new opportunities in the global fashion community. “I want to thank Tailored Brands for our partnership over the past eight years. We’ve accomplished a great deal together as we’ve built one of the leading men’s wear brands in the U.S. and Canada,” he said.
WHP is a new brand management firm affiliated with Wave Hill Partners, the advisory practice founded by Yehuda Shmidman, the former CEO of competing brand management firm Sequential Brands Group. WHP is backed by a $200 million equity commitment from funds run by Oaktree Capital Management. The new kid in the brand management arena made its first deal last July by acquiring the Anne Klein brand.
While most of Anne Klein‘s sales are in the U.S., the brand last fall expanded into China and there are plans in place to expand distribution to Mexico this fall, signaling a big push internationally. That appears to be the direction for the Joseph Abboud brand as well.
“With over 30 years of heritage, the Joseph Abboud brand has cemented its position as one of the most established and trusted brands in fashion,” Shmidman said. “We are excited to have the opportunity to invest in the next chapter of growth for the brand in close partnership with Dinesh and his team at Tailored Brands, and around the world with current and future partners.”
Tailored Brands has been facing financial pressure since it acquired Jos. A. Bank Clothiers Inc. in 2014 for $1.8 billion, a deal that raised its current debt load to more than $2 billion. The men’s wear retailer, best known for its deals in suiting at its Men’s Wearhouse stores, also has been impacted by changes in the retail landscape, as well as a continuing casualization of the workplace that has dampened demand for suits and formal clothing.
Tailored Brands acquired the Joseph Abboud brand in 2013 for $97.3 million.