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Will Jessica Simpson Claw Back Her $1 Billion Brand? Week Ahead

The Jessica Simpson brand remains the most successful among bankrupt Sequential Brands Group‘s portfolio, and Jessica Simpson, the celebrity, has offered $65 million in cash to acquire the 62.5 percent interest in her brand that she doesn’t already own.

Market sources said Simpson, whose brand offers an extensive line of apparel, shoes and accessories, has consulted investment bankers in a bid to regain control of Jessica Simpson Collection, which Sequential acquired in 2015. This singer had considered this option long before the summer, when rumblings first surfaced that Sequential might be in trouble. The brand is believed to have generated $1 billion annually prior to the Covid pandemic.

With You, Inc., the venture between Simpson and Sequential, holds the intellectual property assets and licenses for the Jessica Simpson business. Simpson holds a 37.5 percent stake in the venture. A sale agreement was inked between Sequential and With You on Oct. 7, according to a Securities and Exchange Commission document.

Sequential for its part was struggling well before this past summer rolled around. It began selling off assets in 2019, including Martha Stewart Living Omnimedia and Emeril Lagasse, along with their intellectual property, to rival Marquee Brands, giving it $175 million in the process. But Sequential was hampered by high debt, and by December 2020, the brand management firm put itself up for sale. The company also was the subject of an SEC accounting lawsuit filed on Dec. 11, 2020.

Sequential on Tuesday entered into a stalking horse agreement with WRBH Brands Group for the assets of William Rast, the denim and sportwear brand founded by Justin Timberlake and Trace Ayala in 2005.
Justin Timberlake Galaxy/STAR MAX/IPx

Bids for all Sequential brands are due Monday.

Sequential on Tuesday entered into a stalking horse agreement with WRBH Brands Group for the assets of William Rast, the denim and sportwear brand founded by Justin Timberlake and Trace Ayala in 2005. Court documents show the $1 million purchase price will be payable in installments, or $800,000 at closing followed by two $100,000 payments, one by the first anniversary of the closing date and second by the second anniversary. WRBH is affiliated with Millennial Apparel Group, a Rast licensee.

Earlier in the bankruptcy process, Sequential signed an agreement with Centric Brands to acquire Joe’s Jeans for $42 million, or $38.25 million plus an earnout over a five-year period. Centric, the parent of the Zac Posen brands, successfully emerged from its own bankruptcy in October 2020. And Galaxy Gainline Holdings, a key licensee for And1, agreed to acquire Sequential’s active division brands for $333 million.

An auction is set for Friday, if needed, with a sale hearing on accepted offers set for Nov. 4.