Retail aggregation firm Authentic Brands Group has scrapped its plans for an initial public offering (IPO) and will sell stakes to private equity firm CVC Capital, hedge fund HPS Investment Partners and a group of existing stakeholders at a $12.7 billion valuation, according to a CNBC report Monday (Nov. 22).
Authentic Brands oversees a wide variety of companies, including apparel retailers Forever 21 and Aeropostale, department store chain Barneys New York, men’s suit maker Brooks Brothers and Sports Illustrated magazine. It’s expected to close a deal for sneaker maker Reebok early next year.
CEO Jamie Salter said Authentic Brands will target 2023 or 2024 for its IPO after filing the paperwork in July, adding he has five more years on his contract.
“The IPO climate is ridiculous,” Salter told CNBC in a phone interview. “I think we would have gotten a massive valuation … maybe even more than what we sold the business for. But guess what? I’d rather be private.” Authentic Brands was seeking a $10 billion valuation in its IPO, he said.
CVC and HPS will each have seats on Authentic Brands’ board of directors once the deal closes in December. BlackRock will remain Authentic’s largest shareholder. Other investors include U.S. mall owner Simon Property Group, General Atlantic, Leonard Green & Partners, Brookfield and Basketball Hall of Famer Shaquille O’Neal.
“We have the same playbook today as we had yesterday,” Salter told CNBC. “You’ll hear about more acquisitions by the end of this year.”
Authentic Brands Group oversees more than two dozen lifestyle and entertainment brands, including Nautica, Nine West, Aéropostale and Juicy Couture. It also owns entertainment brands including Marilyn Monroe, Elvis Presley and Sports Illustrated.
Its largest licensee is SPARC Group, a joint venture between Authentic and Simon Property Group that operates Brooks Brothers, Forever 21 and Eddie Bauer, among several other brands. SPARC has almost 4,000 retail stores and shop-in-shops and more 46 million web visitors monthly.
SPARC and Authentic partnered with buy now, pay later firm Klarna in May to allow buyers to pay in four interest-free installments. Authentic also added Izod, Van Heusen, Arrow and Geoffrey Beene to the fold in the summer, bringing its total to more than 30 brands since it launched in 2010.