Simon Property, Authentic Brands buying Brooks Brothers for $325M

Brooks Brothers will be purchased for $325 million by a retail venture owned by licensing company Authentic Brands Group and Indianapolis-based shopping mall owner Simon Property Group, the famous clothier announced late Tuesday.

The venture, called Sparc Group LLC, initially offered $305 million for the retailer last month. It will continue running at least 125 of Brooks Brothers’ 200 retail locations as part of the deal.

The 200-year-old New York-based clothier, which has dressed nearly every U.S. president, filed for Chapter 11 bankruptcy in July.

Brooks Brothers has just one store in Indianapolis, at the Fashion Mall at Keystone.

A hearing to approve the sale is currently scheduled for Friday. The transaction is expected to be completed by the end of the month if all closing conditions are satisfied.

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3 thoughts on “Simon Property, Authentic Brands buying Brooks Brothers for $325M

  1. Not that I’ve reviewed any numbers, but this seems pretty smart on the face of it. Strip our all the old debt in BK, keep the stores open that performed best in the last few years (and presumably all of the ones in Simon’s malls which avoids vacancies), and dump the lease obligations on the under-performing stores. When things get back to normal post-COVID, this is a venerable brand that can thrive with a certain segment of the workforce.

    1. Yes great for Simon. What about those stores located in properties not owned by Simon. Would you like to suck up the loss of someone occupying space and not paying rent until you get them out?

    2. Rhea, not sure why you’re upset with me. I was just commenting on the merits of Simon buying the assets of BB out of BK. It seems like this is a half-decent long-term play for Simon. They’ve taken their lumps in FFO and stock price like all REITs. Many tenants, and thus landlords, everywhere are getting creamed. I understand that. It’s an unfortunate situation for all concerned, yet vacancies are one of the risks of owning rental properties. I feel bad for residential landlords who may have tenants that are barred from being evicted who must still pay the mortgage payment to the bank – yet I also understand that public policy is not well-served by those families who were thrown out of work also getting thrown out of their homes. It’s not good anywhere for anyone. At least a property owner can nudge a bank to relax their obligations since what does a bank want to do with, say, a strip mall with half the tenants unable to pay rent and no willing new tenants on the horizon?