Authentic Brands Group Chief Executive Jamie Salter.
Source: Authentic Brands Group
The company that has bought retailers comparable to Aeropostale, Barneys New York and Forever 21 out of bankruptcy is searching for shopping for alternatives throughout the coronavirus pandemic.
“My strategy is simple. Buy low, sell high,” Authentic Brands Group Chief Executive Jamie Salter informed CNBC in a telephone interview.
“We make sure, if we get into retail, that [the company] has a purpose,” he stated. “If it doesn’t have a purpose, we find a purpose.”
The pandemic, which compelled hundreds of shops’ shops and malls shut towards the tip of March, has strained many companies’ liquidity and already pushed some over the brink and into bankruptcy. Department retailer chains Neiman Marcus, J.C. Penney and Stage Stores have every filed Chapter 11 throughout the disaster. So did attire maker J.Crew, together with the house items chain Tuesday Morning. Pier 1 Imports, which had filed for Chapter 11 bankruptcy safety earlier than the coronavirus being declared a pandemic, couldn’t discover a purchaser throughout the disaster and has been compelled to liquidate.
Now, many of those of corporations are searching for a brand new proprietor for bits and items — or in some situations all — of their companies.
That purchaser might find yourself being ABG. It has been for quite a lot of different struggling names. ABG additionally at present manages the attire model Nautica, sportswear maker Juicy Couture and shoe company Nine West, amongst others.
“I think there is a place for J.C. Penney,” Salter stated, citing one instance of a bankrupted company he views value saving. “They have been floundering. They haven’t really found their spot. … But I think there is a play for J.C. Penney. I think J.C. Penney needs a purpose. And I have my ideas on what it should be.”
He declined to touch upon whether or not he has held talks with Penney. Private fairness agency Sycamore has been contemplating shopping for Penney outright or taking a stake in the division retailer, in accordance to Reuters. That report urged a wide range of potential transactions are being thought of.
Penney has till July 15 to obtain the funding it wants and to meet the milestones required of it by its bankruptcy lenders, CNBC beforehand reported. Otherwise, it’s going to head towards a possible sale.
Meantime, males’s attire maker Brooks Brothers is speaking to banks about elevating financing for a possible bankruptcy that might come as quickly as July, folks acquainted with the matter have informed CNBC.
“Brooks Brothers is a global brand,” Salter commented. “I am looking at it from a global standpoint. Certain brands travel, and certain brands don’t travel.”
He additionally stated J.Crew, recognized for its preppy appears to be like, is a model that is effectively acknowledged globally.
It’s potential ABG might do extra offers with megamall homeowners comparable to Simon Property Group and Brookfield, given their monitor document. The three got here collectively to purchase Forever 21 out of bankruptcy. And all of them have possession of the teenager attire company Aeropostale.
Brookfield in early May stated it was launching a retail revitalization program to give attention to taking noncontrolling stakes in retailers to help them with their capital wants. It stated it was focusing on spending $5 billion on the plan.
“We are partners with our landlords,” ABG’s Salter stated.
Meantime, as purchasing malls reopen throughout the U.S. and native lockdown restrictions are easing, Salter stated he has been impressed with the bounce again amongst shoppers.
“The malls are busy,” he stated. “People are going with a purpose. Average transactions are way up, and the numbers are increasingly getting better.”
“Apparel will be back,” he added. “People are not necessarily buying less apparel, they are buying different apparel. My guess is Lululemon sales are through the roof right now.”