Authentic Brands Group (ABG) has filed to go public with its portfolio of over two dozen lifestyle and entertainment brands following a series of high-profile acquisitions over the past several months.
ABG, which generates much of its revenue from licensing the brands it owns, said lifestyle brands such as Nautica, Nine West, Aéropostale and Juicy Couture represented 82 percent of its revenue in 2020 and 85 percent of its revenue in the first three months of this year. Authentic Brands also owns several entertainment brands such as Marilyn Monroe, Elvis Presley and Sports Illustrated.
Authentic Brands says it is the third largest licensor globally based on retail sales, with Disney being the largest.
The preliminary initial public offering (IPO) filing, submitted Tuesday (July 6) to the U.S. Securities and Exchange Commission, doesn’t set a price for the initial public offering or place a valuation on the business. In May, CNBC reported that Authentic Brands is targeting a $10 billion valuation, which would put the company’s market value higher than brands such as Nordstrom, Kohl’s and Dick’s Sporting Goods.
Authentic Brands said its largest licensee is SPARC Group, a joint venture between Authentic and Simon Property Group that operates Brooks Brothers, Forever 21 and Eddie Bauer, along with several other brands.
Through SPARC, which designs, manufactures and distributes apparel and accessories through retail stores and digital channels, Authentic Brands saw $2.6 billion in global retail sales last year and over $850 million in sales over the first three months of 2021.
According to SPARC Group’s website, it has nearly 4,000 retail stores and shop-in-shops and over 46 million web visitors monthly.
SPARC and Authentic Brands in May partnered with buy now, pay later (BNPL) firm Klarna to allow consumers to pay for clothes in four interest-free installments.
Changing Landscape
The Authentic Brands IPO comes amid a deluge of other companies looking to go public and at a moment when optimism is high for the future of retail. As the global economy reopens, retailers are seeing shoppers return in record numbers, with the National Retail Federation projecting nearly $4.5 trillion in retail sales this year.
The industry is also grappling, however, with a transition to digital that has been accelerated by the COVID-19 pandemic. Over 90 percent of consumers have placed an online order for a product or service at least once recently, according to PYMNTS research, and many of those online shopping habits are expected to stick.
In a letter attached to the IPO filing, CEO Jamie Salter said he started Authentic Brands Group after a career in the brand business showed him that “brands were structured for a different era — before the speed of digital and the complexity of global; antiquated, and ultimately difficult to retool as the market and the consumer evolves.”
Authentic’s Acquisitions
Over the past few months, Authentic Brands has made a string of acquisitions, including its addition of Eddie Bauer to the SPARC portfolio in May and its purchase of the Izod, Van Heusen, Arrow and Geoffrey Beene labels last month.
Since its founding in 2010, Authentic Brands has acquired over 30 brands. With each deal, Salter said the company evaluates how it can rebuild the brand to be exactly what it wants — namely, being the best at every step of the value chain.
Salter said in the filing that he intends for the company to continue evaluating new deals “with creativity and discipline,” as Authentic Brands is “in early innings on the next phases of our digital 2.0 strategy and our global growth agenda.”
“With our versatile model,” he added, “the way we look at the world there is $13 trillion of branded commerce in our sights.”
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