Authentic Brands Group strikes deal to acquire Vince’s intellectual property

Dive Brief:

Vince Holding Corp. struck a deal to sell the intellectual property of its Vince brand to Authentic Brands Group, a company known for snapping up struggling businesses.
Under the deal, Vince Holding Corp. will move Vince’s intellectual property to a newly formed subsidiary controlled by Authentic Brands Group. In return, Vince Holding Corp. will receive $76.5 million in cash from Authentic and a 25% ownership stake in the subsidiary, to be called ABG Vince.
Vince Holding Corp. and Authentic will also enter into an exclusive, long-term license agreement for the subsidiary to use Vince’s intellectual property. Vince will pay a royalty fee to ABG Vince, as well as receive a quarterly distribution equaling 25% of its net cash, according to a Monday news release.

Dive Insight:

Vince Holding Corp. will use the proceeds from this transaction to boost its overall working capital and repay in full its $27.7 million outstanding balance under its term loan credit facility.

Authentic Brands Group — a global brand development, marketing and entertainment platform — will be the majority owner of ABG Vince with a 75% interest. Authentic owns a portfolio of more than 40 brands and connects them to operators, distributors and retailers. It also recently snapped up Boardriders, which owns several lifestyle brands including Billabong and Quiksilver.

The agreement is expected to close in the second quarter of 2023, pending customary closing conditions. After the 10-year term ends, Vince Holding Corp. will have eight 10-year renewal options.

Vince Holding Corp. remains publicly traded on the New York Stock Exchange, and the partnership doesn’t change its management or board of directors.

Vince Holding Corp. CEO Jack Schwefel said in the news release that Authentic’s expertise in lifestyle and entertainment will provide the Vince brand with the ability to grow in other categories and territories.

That includes “expanding our international presence, growing our men’s business and selectively opening new retail doors in the U.S.,” Schwefel said.

In its fourth quarter, Vince Holding Corp.’s net sales decreased 7.8% to $91.3 million. This marks an 8% decrease in Vince brand sales and a combined 6.4% decrease in Rebecca Taylor and Parker sales.

The company announced in September that it would wind down its Rebecca Taylor business to focus on the Vince brand. In December, the Rebecca Taylor subsidiary sold its intellectual property and certain related ancillary assets to an affiliate of Ramani Group for $4.3 million and recognized a gain of $1.6 million, according to its earnings release.