Sparc Group LLC, a retail partnership between Simon Property Group and Authentic Brands Group, has agreed to buy Brooks Brothers. Last month, the 202-year-old clothier became the latest legacy retailer to declare bankruptcy due to the economic impact of the coronavirus.
The price tag for the acquisition was $325 million, which is hardly a bargain considering that Sparc Group previously acquired Forever 21 for $81 million in February. Sparc Group, which also owns Aeropostale and Juicy Couture, originally made a $305 million bid before sweetening the deal with an extra $20 million.
WHP Global also reportedly worked on a bid to buy Brooks Brothers, but eventually dropped out. A Brooks Brothers spokesperson did not reveal how many bids the company received. In fact, conversations between Sparc Group and Brooks Brothers were reportedly active before the bankruptcy filing in July.
As part of the deal, Sparc Group is now required to keep open a minimum of 125 Brooks Brothers’ physical retail locations. Brooks Brothers has about 500 stores worldwide, including roughly 200 stores in North America. No decision has been made about which stores will close.
It’s been a rough year for Brooks Brothers. The number of company employees on LinkedIn plummeted from 3,300 to 3,190. Depending on upcoming store closures, the employee count could continue to drop in the future
The pandemic was the straw that broke the camel's back for Brooks Brothers. In recent years, the company has struggled to compete in a world where casual workplaces and the rise of work from home jobs diminished the need for business professional attire.
Sparc Group will focus on maintaining the best-performing Brooks Brothers locations in an attempt to let Brooks Brothers continue to dress US presidents for years to come.