Mall owner Simon and Authentic Brands bid $ 305 million for Brooks Brothers

A pedestrian walks in front of a Brooks Brothers storefront wearing a mask during a COVID-19 crisis on 06 May 2020 in Vancouver, Canada.

Andrew Chin | Getty Images

A company known as Spark LLC, associated with US mall owner Simon Property Group and apparel-licensing firm Authentic Brands Group, is bidding $ 305 million for the bankrupt Brook Brothers, the court said on Thursday .

The filing states that the offering is still subject to better and higher bids and court approval, with Brooks Brothers having at least 125 stores open for business.

A court hearing to approve the bid has been set for August 3, while other competing offers are due for filing on August 5. A hearing to approve the final sale of the Brooks Brothers property is scheduled to take place on August 11.

Simon, the largest US mall owner by the number of malls it operates, had already supplied Brooks Brothers to finance through its reorganization, in conjunction with ABG, as the retailer looked for a buyer . An $ 80 million loan from the pair that referred to itself as Spark, in a rare deal that has no interest or fees.

Brooks Brothers, known as the chief of polo shirts and polished preppy uniforms, filed for Chapter 11 bankruptcy court protection from creditors earlier this month on July 8. At that time it had about 250 locations in North America.

This is definitely not the first time Simon and ABG have worked together. They are increasingly looking to do this – now through this spark unit. Simon brings expertise in real estate, with ABG bringing expertise in manufacturing and licensing.

ABG and Simon bid horses together $ 191 million for the assets of the bankrupt-declared manufacturer Lucky Brand, which is still subject to court approval.

Prior to the formation of Spark, ABG and Simon came together in 2016 to save teenage apparel retailer Aeropostale from bankruptcy. And, in a deal with mall owner Brookfield Property Partners, they acquired 21 from bankruptcy last year.

CNBC’s report says the owners of America’s largest malls are increasingly making deals with retailers to guard against the coronovirus epidemic. Dozens have filed, including Jessie Penny, Neiman Marcus, J. The parent company of Crew, New York & Co., RTW Retailwinds and Ann Taylor’s parents include the Assena Retail Group.

In many instances, as it turns out, these bankrupt retailers are the major tenants in the mall, with a store count. Meanwhile, some of the country’s largest retail real estate owners, such as Simon, are sitting on cash. Too much of him. On June 29, in an investor update, Simon stated that it had liquidity of about $ 8.5 billion on its balance sheet, including about $ 3.5 billion in cash. It issued $ 2 billion in senior secured notes on July 7.

ABG also manages brands such as New York, Nautica and Nine West, according to its website.

Simon’s shares are down around 59% this year. The company has a market cap of $ 18.9 billion.

Read more: Here’s the full press release from Brooks Brothers