Authentic Brands Group in deal with fashion retailer Vince
Authentic Brands Group continues to dive deeper into fashion.
The brand owner and development firm has entered into a partnership with Vince Holding Corp. to acquire the Vince brand intellectual property. Under the terms of the agreement, the Vince brand will operate within a subsidiary in Authentic called ABG Vince
In return, Authentic will pay VNCE $76.5 million in cash and a 25% interest in the new subsidiary. Through the agreement, Authentic will own the majority stake of 75% membership interest in ABG Vince.
In connection with the partnership, the two companies signed a 10-year license that will allow Vince to continue running its current operations with the option for eight 10-year renewals.
The deal comes about a month after Authentic made a binding offer to purchase action sports and related lifestyle apparel company Boardriders, parent company of Quiksilver and Billabong.
Vince Holdings will remain a publicly-traded company and will continue its existing operations, with no changes to management or its board. Founded in 2002, the brand offers women’s and men’s clothing, footwear and accessories through 50 full-price retail stores, 17 outlet stores, its e-commerce site and through its subscription service, Vince Unfold, as well as through premium wholesale channels globally.
In a statement, Vince CEO Jack Schwefel said that the partnership with Authentic would provide it with the capital to strengthen its balance sheet, allowing it enhance its focus on driving margin expansion and its strategic growth initiatives, including selectively opening new U.S. stores, expanding its global presence, growing its men’s business and leveraging e-commerce capabilities.
“Through this strategic partnership we will also benefit from leveraging Authentic’s expertise and lifestyle and entertainment platforms, which provide opportunities to grow the Vince brand into adjacent categories and territories,” said Schwefel.
“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, founder, chairman and CEO of Authentic. “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.”
Solomon Partners is serving as financial advisor and Ropes & Gray LLP is serving as legal advisor to VNCE on this transaction. Katten Muchin Rosenman LLP is serving as legal advisor to Authentic.
The transaction is expected to close within the second quarter of calendar 2023 and is subject to customary closing conditions.