Ellen Tracy and Caribbean Joe Island Supply Co. are officially under new ownership after the brands changed hands at the end of July.
Privately held GMA Group paid Sequential Brands Group subsidiary Brands Matter $17 million on July 30 for Ellen Tracy and $3 million for Caribbean Joe, according to federal filings, which show the agreement covers the brands’ intellectual property and related assets.
GMA president and CEO George Altirs said women’s sportwear and lifestyle label Ellen Tracy makes an “excellent addition” to the company’s portfolio of fashion and sporting goods-focused consumer brands.
“We look forward to working with our partners to expand the distribution globally,” he added.
What’s more, Altirs said his firm has eyed Caribbean Joe since it relaunched in 2019 with new partnerships in categories including fragrance, kid’s swimwear, women’s pajamas and loungewear, and men’s and women’s sportswear. Since then, the brand has broadened its reach to casual footwear, socks and accessories. “Caribbean Joe now offers an extended list of product categories and we will work with our partners to expand the offerings and distribution in the coming years,” he said.
The sale, however, is unlikely to make much of a dent in the financial struggles plaguing Sequential, which in October 2019 first revealed it was looking into options to rebalance the business. In April that same year, the New York City brand management firm offloaded Martha Stewart Living Omnimedia and the Emeril Lagasse to chip away at ballooning acquisition-linked debt, deciding eight months later to put itself up for sale.
Piling onto its troubles, the owner of brands including Joe’s Jeans, Justin Timberlake’s William Rast, Gaiam, Avia, and Jessica Simpson Collection, its most successful endeavor with roughly $1 billion in pre-Covid annual business, is the subject of bankruptcy speculation that exploded last month. Jessica Simpson, the celebrity and personality behind her eponymous brand, meanwhile, is said to be in talks to take back her popular lifestyle label. On top of that, legal trouble has dogged Sequential, which faced a Securities and Exchange Commission securities fraud investigation in addition to a shareholder lawsuit.
Proceeds from the GMA deal weren’t on Sequential’s books for very long. After the transaction, the struggling company paid $19.6 million on a loan and warned again about the very likely possibility of going out of business, according to the SEC documents detailing the GMA deal.
Sequential’s board is still weighing its options, including refinancing debt, shedding brands or selling the company outright, which could happen while in bankruptcy, documents state.