Authentic Brands Growing Retail Portfolio Crowds Larger Rivals After PVH Purchase

Less than a month after closing its purchase of the iconic Eddie Bauer franchise, clothing conglomerate Authentic Brands Group struck again this week when it announced it was adding the Izod, Van Heusen and Arrow labels to its burgeoning portfolio.

While the purchase of this basket of Heritage Brands from PVH Corp. for approximately $220 million is expected to close in the third quarter, it also marked the latest in a series of acquisitions that Authentic Brands has embarked on over the past several years. The company has previously worked with two of the nation’s biggest mall owners, Simon Property Group and Brookfield Property Partners, to purchase apparel companies Aeropostale and Forever 21.

Authentic and Simon also run a joint venture called SPARC Group, which operates Brooks Brothers, Nautica, Aeropostale, Forever 21 and Lucky Brand as well as Eddie Bauer.

Jamie Salter, founder and CEO of Authentic Brands, said the acquisition of Izod, Van Heusen, Arrow and Geoffrey Beene “was particularly attractive” because of the well-established partnerships PVH has developed for the brands.

“Each brand has strong consumer recognition, global distribution anchored at leading retailers and robust product programs with best-in-class licensing partners,” Salter said. “We believe there are significant opportunities to tap into the brands’ rich histories and to further grow their presence around the world.”

The news of Authentic’s acquisition also comes on the heels of reports that it is preparing for an initial public offering that values the company at $10 billion — over double what it was valued when BlackRock invested in Authentic Brands two years ago.

It’s easy to see why Izod, Van Heusen and Arrow appeal to ABG. The U.S. workforce is preparing to return to office environments en masse after over a year of working from home, meaning many consumers will be looking to refresh their wardrobe — potentially with new dress shirts, polo shirts and dress pants. And last month, the Wall Street Journal reported that foot traffic to apparel stores has rebounded to almost pre-pandemic levels.

Other companies have set the groundwork to take advantage of this, too: On Wednesday, Nordstrom and Indochino said they are launching nearly two dozen store-in-store locations in an attempt to boost sales.

A Narrower Focus

Stefan Larsson, CEO of PVH Corp., said the “difficult decision” to sell the Heritage Brands — which include PVH’s namesake Van Hausen — will allow the company to focus more on its Calvin Klein and Tommy Hilfiger brands.

“We continue to execute on our accelerated recovery priorities across our businesses globally,” Larsson said. “This transaction reflects our commitment to driving our next chapter of sustainable, profitable growth.”

The sale of Heritage Brands will mean lower sales for PVH, though, with the company shaving 2 percentage points off its growth projections for the year; the company now expects revenue to increase by 22 to 24 percent year-over-year.

In addition to Calvin Klein and Tommy Hilfiger, PVH also has intimates and underwear brands Warner’s and True & Co. The company completed the sale of its Speedo North America business in April 2020.