Sequential Brands Group has sold its Ellen Tracy and Caribbean Joe Island Supply Co. to the GMA Group, WWD has learned.
Ellen Tracy sold for $17 million and Caribbean Joe was sold for $3 million, according to a filing with the Securities and Exchange Commission. The sale was made by Brand Matter LLC, a subsidiary of Sequential.
Ellen Tracy, once a powerhouse label in the contemporary and bridge markets with a strong appeal to working women, was founded in 1949 by the late Herb Gallen. Originally, Gallen sold cheap blouses but as many women entered the workforce, he infused much greater style in the offering, teaming with his chief designer Linda Allard whom he eventually married. The brand still has strong consumer awareness and is primarily distributed through department stores, off-price chains, warehouse club stores and online. There was never an Ellen Tracy. Gallen invented the name.
“Ellen Tracy is well known in the women’s fashion industry and is an excellent addition to our portfolio. We look forward to working with our partners to expand the distribution globally,” commented George Altirs, president and chief executive officer of the GMA Group. The New York City-based, privately held, 30-year-old GMA Group owns the Capelli and Ballet brands. Capelli has a wide range of products including accessories, home goods, sporting goods and fitness equipment. Ballet is a jewelry brand.
Caribbean Joe Island Supply Co., a casual, sportier brand, targets men, women and children with sportswear, swimwear, casual footwear, sleepwear, socks, accessories and fragrance. It’s sold primarily at off-price chains, online with Amazon, and a handful of department stores.
“Since its relaunch in 2019, we’ve had our eye on Caribbean Joe,” Altirs said. “Caribbean Joe now offers an extended list of product categories and we will work with our partners to expand the offerings and distribution in the coming years.”
Under financial pressure, Sequential, a brand management/licensing firm, has been selling off assets as it struggles under a debt load of $463.2 million with a market capitalization of just $21.9 million, according to S&P Capital IQ, as reported last May. Around that time, William Sweedler, Sequential’s executive chairman, left the company. The company also managed to get waivers on its credit agreement.
The New York-based Sequential last year disclosed that it was exploring strategic alternatives, involving putting assets including the entire company on the market. In April 2019, Sequential sold its Martha Stewart and its Emeril Lagasse home division to Marquee Brands for $166 million. Last April, Sequential revealed it sold its Heelys brand to BBC International for $11 million.
Sequential’s biggest holding is the Jessica Simpson Collection. Sources have said Simpson and her mother, Tina Simpson, are working with William Susman’s Threadstone firm to raise money to buy back the business. Sequential bought the master license for the sprawling lifestyle brand in 2015 and is believed to have maintained it with annual sales of around $1 billion, pre-pandemic.
Sequential’s brand portfolio also includes Gaiam, a popular yoga brand in the mass and mid-tier markets, as well as Avia and And1, which are also strong performers in those channels. It also owns William Rast and Joe’s Jeans.
Sequential’s total revenue from continuing operations for the fourth quarter ended Dec. 31, 2020, was $23 million, compared to $24.2 million in the prior year quarter. On a GAAP basis, loss from continuing operations for the fourth quarter 2020 was $4.4 million or $2.65 a diluted share, compared to loss from continuing operations for the fourth quarter 2019 of $7.9 million or $4.87 a diluted share.