Bankrupt clothing retailer Brooks Brothers has received a $305 million bid backed by Authentic Brands Group, owner of Barneys New York and mall owner Simon Property Group (SPG) - Get Report, to buy the bankrupt men’s clothing chain and keep it in business.
Sparc Group, which is backed by Authentic and Simon, has agreed to the $305 million bid for the 200-year-old company’s operations, including its stores and its three U.S. manufacturing facilities, according to a statement released late Thursday.
The group has committed to take on at least 125 stores in its so-called stalking-horse bid, which sets a minimum price for the auction.
WHP Global, meantime, another retail brand manager that has already pledged $75 million to finance Brooks Brothers through its bankruptcy, also is assembling its own buyout offer. The company, which owns the Joseph Abboud and Anne Klein nameplates, could produce a competing offer before an Aug. 5 deadline.
The agreement with Sparc comes with a $9.1 million break-up fee and up to $1 million in expenses if the stalking horse doesn’t win the auction, according to court papers.
Brooks Brothers filed for bankruptcy earlier this month after more than two centuries in business, another victim of the coronavirus pandemic and forced shutdown that has decimated the brick-and-mortar retail industry.
Authentic specializes in resuscitating out-of-favor brands, including Aéropostale and Nautica. Sparc runs more than 2,600 retail stores, shop-in-shops and an ecommerce platform, the company said.
Brooks Brothers said on July 8 when it filed for bankruptcy that it plans to permanently shut 51 Brooks Brothers stores in the U.S. It has 500 worldwide in 45 countries, with 200 in North America.