Jessica Simpson is scrambling to buy back her clothing brand from a struggling licensing company that is in danger of filing for bankruptcy.
The 40-year-old former pop singer and her mother, Tina Simpson, are working with boutique investment bank Threadstone to raise cash to repurchase the Jessica Simpson Collection from Sequential Brands, a licensed company whose executive chairman is in chaos at the company , according to a source.
William Sweedler, who launched Sequential ten years ago, resigned over the weekend as executive chairman, according to a regulatory submission, to “pursue other matters.” His dismissal, the submission said, “does not involve any disagreement with the company on any matter concerning its operations, policies or practices”.
Shares of sequential brands, which include other brands Joe’s Jeans, Ellen Tracy and Caribbean Joe, rose 38 percent to $ US17.02 ($ A22.07) on Tuesday.
In 2015, Sequential Brands bought a 62.5 percent stake in Jessica Simpson for $ 117 million ($ A152 million) from brand Vince Camuto of shoes and handbags, which it had originally purchased for $ 15 million ($ A19 million).
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Sequential grew rapidly, with annual sales at retail adding half a billion dollars to the pandemic, according to a source close to the company.
Unlike many celebrity brands that launched and flared around the same time in 2005 – including Mandy Moore’s Mblem line, Lindsay Lohan’s Leggings, 6126, and Miley Cyrus’ collaboration with Max Azria for a line at Walmart – Simpson’s brand has had lasting power,
The Jessica Simpson Collection, a collaboration between the singer, her mother and sister Ashlee Simpson, includes a children’s line, home goods and shoes. It has been sold in outlets including Macy’s, Nordstrom’s and Dillard’s.
But while the With you singer has been actively promoting her line – most recently an advertising campaign in September with the entertainer with her daughters – financial problems at Sequential are growing as the pandemic has plagued business in department stores. Sequential recently reported a debt tax of $ US463 million ($ A600 million).
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On Friday, buy-out company KKR, a second lender to Sequential, named Marjorie Bowen, a distressed retail expert and former director at investment bank Houlihan Lokey, took immediate effect after Sequential’s board – a move that insiders said looks like submit a preparation for a possible bankruptcy.
Sequential sold another notable brand, Martha Stewart’s homemaking empire, for $ US215 million ($ A279 million) in 2019 – mostly because the brand cost the company more than it was worth, such as The Post report.
WWD first reported that Simpson is in talks with Threadstone to raise capital.
This story was originally published in the New York Post and is reproduced here with permission