Dive Brief:
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Express landlords Simon Property Group and Brookfield Properties are closer to acquiring another one of their tenants, after the U.S. Bankruptcy Court for the District of Delaware on Thursday said bidding could move forward.
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The mall REITs in April joined with private equity-backed brand licensing firm WHP Global to acquire the apparel retailer, along with its UpWest brand and Bonobos. WHP Global first took a stake in Express in late 2022 and in Bonobos last year.
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Their stalking horse bid includes about $160 million in cash and $38 million of assumed liabilities, according to a revised court filing Wednesday. If a higher bid comes in by June 11, an auction is scheduled for June 12.
Dive Insight:
Simon and Brookfield have been here before, mulling an acquisition via bankruptcy court. In 2020 the two mall REITs teamed up to acquire J.C. Penney during its Chapter 11 process. Simon, Brookfield and/or brand management firm Authentic Brands Group have bought up other retailers, too, including Forever 21 and Brooks Brothers, whose IP is owned by Authentic.
Such moves are widely seen as enabling the mall companies to keep their centers filled at a time when many retail tenants are rethinking the mall model. Victoria’s Secret this week said most new stores opening this year will be off-mall locations.
More recently, though, Simon began divesting instead, citing the volatility in the retail business. Last month CEO David Simon told analysts that the company would not have to put up any capital to invest in Express.
In addition to the assets of Express and its sister brand UpWest, the pending deal includes Bonobos, which WHP Global acquired from Walmart last year. The sale would include intellectual property as well as retail stores and operations, per court documents.
WHP Global is backed by private equity firms Solus, Ares Management and Oaktree Capital Management.
