ABG Buys Vince IP in $76.5 Million Deal
Authentic Brands Group (ABG) will purchase the intellectual property of luxury apparel and accessories brand Vince for $76.5 million in cash and a 25% interest in ABG Vince, a newly formed ABG subsidiary. As part of the transaction, the retailer’s parent company Vince Holding Corp. (VNCE) will enter into an exclusive long-term license agreement with ABG, paying a royalty fee and receiving a quarterly distribution equal to 25% of ABG Vince’s net cash.
VNCE will use proceeds from the sale to strengthen its overall liquidity and repay in full an outstanding $27.7 million balance under its term loan credit facility as well as a portion of outstanding debts under its revolving credit facility. The transaction is expected to close in Q2 2023, and VNCE will remain a publicly traded entity and continue existing operations with no planned changes to its management.
“We are pleased to enter into this transformative partnership with ABG, which will provide us the necessary capital to strengthen our balance sheet, allowing for opportunities to enhance our focus on driving margin expansion,” said Jack Schwefel, CEO of VNCE in a statement, adding that the partnership will allow VNCE to focus on our “strategic growth initiatives, including leveraging our enhanced ecommerce capabilities and CDP platform, expanding our international presence, growing our men’s business and selectively opening new retail doors in the U.S. Through this strategic partnership we will also benefit from leveraging ABG’s expertise and Lifestyle and Entertainment platforms, which provide opportunities to grow the Vince brand into adjacent categories and territories.”
ABG has been steadily adding brands to its portfolio over the past few years, including:
- Purchasing the Boardriders brand earlier in April 2023;
- Buying the beleaguered Ted Baker brand in August 2022;
- Paying $2.5 billion to buy the Reebok brand in August 2021; and
- Buying financially troubled retailers including Forever 21, JCPenney, Aéropostale and Brooks Brothers.
“We are excited to partner with Jack and the VNCE management team as we expect to mutually benefit from the strength of the Vince brand that has been developed over the past 20 years,” said Jamie Salter, Chairman and CEO of ABG in a statement. “The addition of another luxury brand to our formidable portfolio is timely as we see demand for luxury goods growing in key markets around the world.