Sequential Brands Group Inc. is nearing the end of its process to divest some of its brands after filing for Chapter 11 bankruptcy protection last month.
According to a source close to the deal, Jessica Simpson and her family are about to close a deal to buy back the portion of their eponymous brand that was sold to Sequential in 2015. Jessica and her mother Tina Simpson, who currently owns a 37.5% stake in the brand, are positioned as stalking horse bidders to buy back the remaining 62.5% of the brand, according to a hearing last week.
The Simpson brand was a bright spot among the continued losses at Sequential, which includes Joe’s Jeans, And1, Avia, and more. Sequential filed for bankruptcy in late August after “significant debt on corporate balance sheet” prevented the company from operating its portfolio. Sequential intends to sell all or most of its assets through an auction and bidding process that will allow interested buyers to bid on its assets.
According to financial documents, the company had net debt outstanding as of December 31, 2020 of $ 452.3 million. To repay the lenders, the company sold off some of its brands this year. Sequential sold sold the Ellen Tracy and Caribbean Joe Island Supply Co. brands to the GMA Group in August for a total of $ 20 million. It also sold sold its Heelys brand values to BBC International for $ 11 million in April and sold its 65% stake in DVS Footwear International LLC to Elan Polo International Inc. for $ 2 million in July.
According to a Reuters Report, Centric Brands LLC, a potential buyer of the Joe’s Jeans line, recently increased its offering by 18% to $ 45 million. Galaxy Universal LLC is offering $ 333 million for Sequential’s activewear brands including Avia, SPRI, Gaiam, And1, and Swisstech.
Competing bids must be submitted by interested parties by October 25th, with a sales hearing on November 4th.