Bankrupt Brooks Brothers Receives Competing Buyout Offers

Brooks Brothers, which filed for bankruptcy protection this week,  already has received two competing offers to take control of the iconic brand's operations.
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Brooks Brothers, the 200-year-old American apparel company that filed for bankruptcy protection this week, already has received two competing offers to take control of the namesake brand’s assets and operations.

Authentic Brands and Simon Property Group  (SPG) - Get Report-backed apparel company Sparc Group are considering a bid to buy Brooks Brothers out of bankruptcy, The Wall Street Journal reported, citing people familiar with the discussions.

WHP Global, which has already pledged $75 million to finance Brooks Brothers through its bankruptcy, also is assembling its own buyout offer, the Journal said, adding that both potential bidders plan to keep most Brooks Brothers stores up and running.

Brooks Brothers filed for bankruptcy on Wednesday 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.

The iconic American brand is the latest retail clothing brand to seek court protection amid lockdowns during the coronavirus outbreak. Neiman Marcus, J.Crew and John Varvatos have all filed for bankruptcy protection since the virus took hold.

Brooks Brothers was already looking to sell itself last year, well before the pandemic rolled into the U.S., amid tepid sales at many of its U.S. locations.

WHP is looking to add Brooks Brothers to its portfolio after buying the Joseph Abboud and Anne Klein brands from struggling parent companies.

Authentic Brands, meantime, has built up its own portfolio of well-known designer brands. The company teamed up with Saks Fifth Avenue parent Hudson’s Bay to buy the Barney’s brand out of bankruptcy last year. 

Sparc, the venture Authentic formed with Simon Property, last week proposed a deal to buy clothing retailer Lucky Brand Dungarees out of bankruptcy, according to the Journal. Sparc also owns a spate of Aeropostale, Forever 21 and Nautica stores.

Brooks Brothers is scheduled to make its debut appearance in the U.S. Bankruptcy Court in Wilmington, Del., on Friday.