Authentic Brands Group and Simon Property Group, joining forces under their venture partnership Sparc, are moving closer to completing a deal for both Brooks Brothers and have closed on its deal for Lucky Brand Dungarees.
ABG and Simon clinched the deal for Brooks Brothers after they upped their offer by $20 million to $325 million. The two, through Sparc, will be in bankruptcy court on Friday seeking court approval of their offer. Presuming the court approves, the transaction is expected to be completed by the end of August.
Under the terms of their purchase offer, Sparc is committed to continue operating at least 125 Brooks Brothers retail locations, although it is likely that more stores will be kept in operation. That’s been the pattern with past joint venture deals they’ve completed for Aéropostale and Forever 21, both done in partnership with Brookfield Property Partners, during their respective bankruptcy cases.
Sparc on Wednesday closed on its $191.5 million purchase of bankrupt Lucky Brand Dungaree after the bankruptcy court approved the sale. The deal includes a $140 million cash payment, as well as the forgiveness of $11.5 million in Chapter 11 debtor-in-possession financing and $40 million in pre-petition loans.
Lucky Brand planned to close 13 unprofitable stores by Sept. 26. At the time of the Chapter 11 filing on July 3, the company operated 112 regular full-price stores and 98 outlet doors across 46 states. Sparc was already named the stalking horse in the case in the event a bankruptcy court auction was deemed necessary. Lucky Brand is owned by an affiliate of private equity firm Leonard Green & Partners, which also happens to be an investor in ABG.