Authentic Brands Group (ABG) is looking to strengthen its position in the luxury market with another acquisition. The group has entered into a deal with the understated luxury brand from California, Vince Holding Corp., to acquire the intellectual property of the Vince brand.
Per the agreement, the intellectual property of Vince will now be housed under a subsidiary of Authentic Brands Group called ABG Vince. ABG will acquire 75% ownership of the subsidiary for $76.5 million, while Vince Holding will hold the remaining 25% stake. In addition, both entities have entered into a licensing agreement, granting ABG the right to operate the Vince business.
In a release, Jamie Salter, ABG’s founder, chairman and CEO, said, “We are pleased to bring this luxury lifestyle brand into the fold and partner with the Vince management team on the brand’s next phase of growth.
“The addition of Vince strategically expands ABG’s portfolio of globally renowned luxe brands. We see significant opportunities to expand Vince’s offerings to meet the growing demand for premium and luxury goods around the world,” Salter continued.
By acquiring the rights to Vince’s brand, ABG has expanded its portfolio of luxury brands, which already includes Judith Leiber, Herve Leger and Ted Baker.
Vince provides men and women with ready-to-wear apparel, footwear and accessories. The company has over 60 retail stores and wholesale accounts, as well as an eCommerce website and a rental subscription service called Vince Unfold. The brand has stated that its existing retail footprint will remain unaffected. However, ABG plans to extend the brand’s reach to major luxury markets.
Back in May 2022, Ted Baker reportedly narrowed its choices for the company to which it planned to sell the brand. In October 2022, ABG completed its acquisition of Ted Baker, shifting from a vertical model to a fully licensed model.
See also: Sycamore Partners Drops Ted Baker Buyout Pursuit
“It’s about finding operating partners in key regions, or licensees who would take over that business and then license it from ABG,” said a spokesperson said at the time. “Our model is, we’re a brand owner, we do all of our marketing and social media and business development. What we don’t do is manufacture product and run stores.”
Taking it up a notch, the acquisition of Vince’s intellectual property allows ABG to tap into a new customer base. Vince is known for its modern and sophisticated approach to fashion and has a loyal customer base that values the brand’s craftsmanship and attention to detail.
Furthermore, the acquisition allows ABG to benefit from Vince’s established distribution channels and retail partnerships. Vince has a strong presence in high-end department stores like Neiman Marcus, Saks Fifth Avenue and Nordstrom, as well as its own branded stores and eCommerce platform.
Although Vince is upscale, with prices ranging from $65 to $2,000, it does not reach the prices associated with high-end luxury brands like Loro Piana and Brunello Cucinelli, with cashmere sweaters running over $1,600 a pop.
That said, Vince’s approach to luxury is to create elevated yet understated pieces for everyday wear, making them a more practical choice for consumers who value longevity and an understated look, referred to as “quiet luxury” or “old money,” which has gained popularity on TikTok with over 36.1 billion hashtag views.
Quiet luxury has arisen as a result of various factors, including a reaction against the trendy and flashy style of pop culture, as well as the economic climate.
Robert Burke, CEO of retail consultancy Robert Burke Associates, states that for consumers outside the 1%, the “quiet” in quiet luxury is what matters most, and people are attracted to buying luxury goods that have longevity.
The acquisition of Vince could also allow ABG to lean into its existing cohort of consumers, who gravitate towards its brands like Vince Camuto, Nautica and Adrienne Vittadini.
See also: Why Shein Thinks Quiet Luxury Will Drive More Sales
Beyond the price point, Vince also offers buy now, pay later (BNPL). This approach to shopping makes it more accessible and convenient for customers, ultimately fueling their interest in fashion and trends.
According to PYMNTS’ “Buy Now, Pay Later Tracker®,” the adoption of BNPL was driven primarily by millennials and Generation Z, with millennials representing the largest group of BNPL users. The report also found that 44% of all Gen Z consumers were likely to use BNPL at least once before the end of 2022, compared to 37% of millennial shoppers.
After reporting a 7.8% drop in sales in the fourth quarter on April 24, Vince will need ABG to put its skillset to use, leveraging some of the same techniques it did with Forever 21, Nine West and Brooks Brothers.
However, Authentic Brands Group seems to already be on it, as the company reportedly struck a deal with Farfetch to expand the presence of several of its portfolio brands, Vince seemingly being one of them.
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