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ABG Casts Acquisitive Gaze Across the Pond

Who has deeper pockets?

American brand management firm Authentic Brands Group (ABG) is considering a bid for both Debenhams and Arcadia Group. It’s a move that could foil Frasers Group’s Mike Ashley’s hope to rescue department store chain Debenhams, as well as a possible bid for Arcadia’s Dorothy Perkins brand, which operates large concession shops within the insolvent retailer’s stores.

ABG chairman and CEO Jamie Salter declined comment. Separately, a source familiar with talks at both U.K. insolvencies said that ABG has had discussions with the respective administrators overseeing the bankruptcies. Whether ABG will make a formal offer and at what price are still to be determined.

Currently, Debenhams is facing liquidation after the start of the New Year, while Arcadia is just starting to market all of its brands.

ABG has more than 30 brands under its umbrella, and is a firm believer in the department store business. It’s even contemplating working with Simon Property Group and Brookfield Asset Management, two mall landlords that have joined with ABG for ventures to acquire specialty chains that lease store space at the shopping centers, to get ABG-owned brands into JCPenney stores. Simon and Brookfield recently acquired Penney’s operations out of bankruptcy.

ABG’s been on the hunt for opportunistic buys to add to its portfolio. Along with Simon and Brookfield, the three acquired bankrupt Forever 21 earlier this year. More recently, ABG joined forces with Simon through its joint venture Sparc to acquire Lucky Brand Dungarees and Brooks Brothers out of bankruptcy. ABG acquired bankrupt Barneys last year. The partnership for mall chains between ABG and Simon and Brookfield began back in 2016 when the three acquired teen retailer Aéropostale out of bankruptcy.

Salter has already said his company can absorb more deals. The company’s backed by financial investors Blackrock, Leonard Green and General Atlantic. Its brands generate substantial cash flow each month.

“Overseas is very important to us,” Salter said at a WWD Virtual Apparel & Retail Summit earlier this month, adding that 40 percent of the company’s business is coming from outside the U.S. And he said he can do more deals. “We’re able to take down deals that are barely sizable. We don’t wish ill will or bad on anyone. We’re hoping the market improves, but if the market has some situations, we will definitely take advantage of the situation. Everyone knows we are a value buyer,” he said.