Authentic Brands Group valued at $12.7 billion following deal with new stakeholders

By

Olivier Guyot

Published
Nov 23, 2021

Fashion industry observers and financial analysts had been speculating for some time about an imminent New York IPO from Authentic Brands Group. Founded by Jamie Salter in 2010, the American group specialized in developing brands through marketing and licensing agreements with industrial and distribution partners, has become a key player in the fashion industry over the last few years, and the announcement this summer that the company would be acquiring Reebok from Adidas gave a particular boost to its visibility.

However, despite the ongoing vogue for fashion IPOs in New York, the company has ultimately opted for a new deal with investment funds. On Monday, November 22, ABG announced that CVC Capital Partners (CVC) and HPS Investment Partners (HPS), as well as various existing stakeholders, have purchased significant equity stakes in the company, valuing the group at $12.7 billion. For the sake of comparison, the market capitalization of Capri, owner of Michael Kors and Versace, is $9.7 billion.

"The investments from CVC Capital and HPS Investment Partners are a strong vote of confidence in ABG’s long-term vision and strategic approach," said Nick Woodhouse, president and CMO of ABG, in a release. "We are primed to continue furthering our global presence, acquiring new entertainment and lifestyle brands and driving organic growth for our portfolio."

Currently, the American company has some 30 brands in a portfolio that generates more than $20 billion in annual retail sales through its partners. The spectrum of the group's activities is fairly broad, including fashion brands such as Nautica, Aeropostale, Forever 21, Vince Camuto, and Frye, but also department store chain Barneys New York and historic American tailor Brooks Brothers. The company also owns a selection of celebrity brands, including Shaquille O'Neal, Marilyn Monroe, and Mohamed Ali, as well as a range of sports and lifestyle labels, such as Vision Streetwear, Spyder, Tretorn, Volcom, Prince, and, once the deal has been finalized in early 2022, Reebok.

ABG recently shared details about the latest developments for a number of its brands in China and the wider Asia-Pacific region. Brooks Brothers, for example, has launched a campaign in China and Japan presenting the Fall/Winter collection designed by Michael Bastian. Juicy Couture, on the other hand, has unveiled a collaboration with Chinese brand Staffonly, while Volcom has opened stores in Chongqing and Chengdu, and Aeropostale is planning to open its first store in Pakistan soon, operations that clearly show that the company appreciates the importance of expanding outside of its domestic market. 

"ABG has shown that its unique business model can successfully innovate and grow brands across a broad spectrum of consumer categories, and we are excited to leverage CVC’s experience in the consumer, retail and media and entertainment sectors to support the company’s growth ambitions," said Chris Baldwin, a managing partner at CVC. "We plan to work closely with the ABG team to execute on their strategic priorities, particularly around international expansion, given our extensive global footprint and experience in local markets around the world."

The group has not given an exact break-down of its capital, but did specify that BlackRock is still the company's largest shareholders and highlighted that Simon, General Atlantic, Leonard Green & Partners, GIC, Brookfield, Lion Capital, Jasper Ridge Partners and Shaquille O’Neal continue to hold significant equity positions.