Nine West, Authentic Brands and the future of apparel retail
The Nine West brand is entering its second life. With its former parent company (which still bears the same name) in Chapter 11, Nine West has joined the likes of Nautica, Airwalk and Shaquille O'Neal — as well as Elvis Presley, Marilyn Monroe and a couple dozen more — at Authentic Brands Group.
The $340 million acquisition is a descriptive one for this moment in retail. Nine West the operator, struggling under a debt pile from a private equity buyout, suffered financially with the decline in department stores and mall traffic. The retailer and wholesaler went bankrupt, while the brand holding company that bought the Nine West name has found success in keeping its books relatively clean of assets — and the capital expenses that come with them.
The price tag for Nine West and Bandolino — well above what ABG initially posited in its original, stalking horse bid — was a good example of how much value can remain in bankrupt retail brands. ABG reportedly had to outbid shoe retailer DSW to make the acquisition. Indeed, the price was so high that the Nine West company is now reportedly looking to sell the rest of its brands in bankruptcy rather than go it alone out of Chapter 11. Neither Nine West nor Authentic Brands responded to Retail Dive requests for comment.
With retail bankruptcies at Great Recession-era levels, plenty of intellectual property has gone up for sale. ABG is one of a number of players who are picking up the pieces, buying up brand properties and trying to breathe new life into them.
"In this case, they have a couple of strategies here," Moody's Senior Analyst Brian Silver told Retail Dive in an interview. "You can build on your core brands. You can revitalize brands from prior eras." Here, Silver pointed to ABG's Vision Streetwear and the vintage celebrity intellectual property it controls, like that for Elvis Presley and Marilyn Monroe.
"And then you have these kinds, in which you have [ABG] turning around the challenges of the orphan brands, that essentially underperformed but have not fallen out of favor with consumers." Into that bucket would go Nine West, Bandolino, Nautica and others ABG has bought up, including Juicy Couture and Aéropostale, the latter of which ABG also bought out of bankruptcy.