Dive Brief:
- After selling its namesake and Bandolino brands earlier this month, Nine West is shopping around its remaining brands, according to a Reuters report that cited unnamed sources. A Nine West spokesperson declined to comment on the report to Retail Dive.
- The company, which filed for Chapter 11 earlier this year, is working with investment bank Lazard to explore a possible sale, Reuters reported. It is considering both an outright sale of its remaining business — which includes the Anne Klein, Kasper and One Jeanswear brands, and a jewelry business — as well as a piecemeal sale, according to the news service.
- Authentic Brands Group completed its acquisition of the Nine West and Bandolino brands earlier this month after beating out shoe retailer DSW at a bankruptcy auction in June. ABG bought the brands for $340 million, about $140 million more than their original stalking horse bid.
Dive Insight:
On selling the Nine West and Bandolino brands, the company that still bears the Nine West name (for now) said it planned to reorganize around Anne Klein, Gloria Vanderbilt, One Jeanswear Group, Kasper Group and The Jewelry Group. Selling it all off, however, offers creditors a faster and easier way to recoup what they have lent the bankrupt retailer and wholesaler.
Reuters reports that the company was encouraged by the final price tag of the brands sold at bankruptcy auction. The dollar figure also shows that these brands have enduring value, even if the company came under financial duress. As with so many other bankrupt retailers, Nine West struggled under a debt load leftover from a leveraged buyout, in this case Sycamore Partners' $2.2 billion acquisition of the Jones Group in 2014.
That buyout is under scrutiny amid Nine West's bankruptcy case. Unsecured lenders to Nine West have pressed ahead with an investigation into the original buyout, which included the sale of Stuart Weitzman. The creditors have asked for and received court approval to depose corporate officials involved with the transaction and other players who may have information regarding possible instances of self-dealing, fraudulent conveyance or other breaches related to the acquisition, according to court documents.
Debtwire legal analyst Joshua Friedman told Retail Dive in June that the creditors' investigation is common for bankruptcy cases, where unsecured creditors have little else for leverage, though he noted that such investigations and any subsequent lawsuits rarely make it all the way to a court ruling. More often they end in settlement. "The goal is ultimately to … increase their own recoveries," Friedman said of the lender group.
Nine West filed for Chapter 11 in April after missing a debt payment in March. Its original plan on filing was for some creditors to take over the company after recouping some of the company's $1.5 billion debt load through IP sales. Shortly after filing, the company signaled plans to wind down the retail operations for Nine West. For years prior, the women's fashion retailer and wholesaler was losing market share amid softening apparel sales and competition from e-commerce players.
