Brooks Brothers filed for bankruptcy in early July.
Photo: Billy Tompkins/Zuma PressBrooks Brothers Inc. reached a deal with Sparc Group LLC—the venture created by Authentic Brands Group LLC and mall owner Simon Property Group Inc. —to sell the company for $305 million.
Sparc’s offer will be subject to higher and better bids due by Aug. 5 and has been designated as the “stalking horse,” setting a minimum for others to beat. The company has set a deadline of Aug. 11 to complete a sale to a buyer.
Sparc has also committed to keeping 125 of the company’s stores open.
WHP Global Inc., an Authentic Brands rival, is also preparing a bid for Brooks Brothers, the firm confirmed Thursday. “It’s early innings in the Brooks Brothers bankruptcy sale process…We are big believers in the power of the Brooks Brothers brand, the global footprint and the management team,” said Yehuda Shmidman, chief executive of WHP.
Both Sparc and WHP Global have been expected to come forward to bid for Brooks Brothers. The two firms competed with each other to provide a bankruptcy loan to the retailer, a competition which Sparc won, with a $80 million loan.
A third suitor has emerged since the iconic American company filed for bankruptcy. Milan-based Giglio Group SpA, which helps fashion companies improve online sales, is spearheading a group of investors who are interested in buying the company and turning it into an online-only retailer.
If successful, Giglio, which is listed on the Italian stock exchange, plans to install Italian managers with fashion-industry experience and close stores to free up funds to invest in digital. Brooks Brothers’ three U.S. factories, which are slated to close next month, would remain open and overseas production would be consolidated in Italy.
Brooks Brothers filed for bankruptcy this month after two centuries in business, unable to withstand the coronavirus pandemic and the forced shutdown of retail shopping. The company has struggled in recent years with a shift toward more casual dress styles at work.
The company had been searching for a buyer through investment bank PJ Solomon since last year.
Authentic Brands Group has been buying up brands for a decade. The firm teamed up with Saks Fifth Avenue parent Hudson’s Bay Co. to buy the Barneys brand out of bankruptcy last year.
Sparc recently proposed a deal to buy clothing retailer Lucky Brand Dungarees LLC out of bankruptcy. Sparc also owns hundreds of Aéropostale, Forever 21 and Nautica stores.
WHP, founded in 2018 with backing from Oaktree Capital Management LP, is looking to add Brooks Brothers to its portfolio after buying the Joseph Abboud and Anne Klein brands.
Write to Soma Biswas at soma.biswas@wsj.com
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