Dive Brief:
- Bluestar Alliance is set to acquire the Justice brand from Ascena Retail Group after winning a bankruptcy auction for the tween brand. Bluestar — which owns the Hurley, Bebe, Tahari, Brookstone, Limited Too and Nanette Lepore brands — won Justice with a $71 million cash bid that ultimately values the brand at $90 million including assumed liabilities.
- Bluestar's winning bid was up more than $10 million from its original stalking horse bid. WHP Global, which owns the Anne Klein and Joseph Abboud brands, was the back up bidder, according to court papers.
- A hearing is set for Thursday to consider the sale in the federal bankruptcy court overseeing Ascena's Chapter 11 case. The parties expect the deal to close before the end of November, according to a press release.
Dive Insight:
Ascena's fire sale of its brands started before it filed for bankruptcy. Last spring it sold its Maurices brand, and later wound down its Dressbarn banner and sold the brand to Retail Ecommerce Ventures, which this year snapped up the Pier 1 and Modell's brands out of Chapter 11 after those retailers liquidated.
In bankruptcy, Ascena has also moved to sell its Catherines business to FullBeauty brands, along with closing more than 1,000 stores across its fleet.
Ascena acquired the Justice chain in 2009 to expand into the tween market. By fall 2019, the chain had 826 stores, and sales had declined slightly from the previous year. As the Justice brand changes hands, it is winding down all of its physical stores, which is expected to be finished in early 2021, according to a separate press release from Ascena emailed to Retail Dive.
Ralph Gindi, co-founder of Bluestar, said the Justice brand has "capacity to grow, particularly in categories and distribution."
"Our goal is to create even deeper connections with our consumers and the brand, while expanding Justice's reach and footprint," Gindi said in the release, adding that his company aims to keep the brand focused on its current demographics and social media following.
