NEW YORK — Authentic Brands Group wrote another big check — its fourth since July 2012 — and has established itself as the new dealmaker in town.
The brand management firm has acquired premium outdoor ski and snow brand Spyder Active Sports Inc. from private equity firm Apax Partners for an undisclosed amount. In connection with the transaction, ABG has sold the operating component of Spyder for an undisclosed amount to Li & Fung Ltd.’s U.S. arm, LF USA, which now also holds the license for current products sold in the Americas, Europe, the Middle East and Africa. ABG retains Spyder’s intellectual property assets. Spyder offers base layers, sweaters, layering items, pants and hats for men, women and children.
The deal with Hong Kong-based Li & Fung is significant, representing what seems to be the first transaction since Dow Peter Famulak became the new head of LF USA in January to turn around operations. Famulak is chief executive officer of both LF USA and LF Europe.
Jamie Salter, chairman and ceo of ABG, said of the Spyder acquisition, “Spyder is widely known and highly respected throughout the outdoor community as one of the most technical and fashionable brands in the winter sports market. We look forward to working closely with LF USA and Spyder management to maintain and grow Spyder’s presence both on and off the mountain.”
Famulak said, “This is a truly global brand. It has extremely strong brand equity and an iconic brand mark that is instantly recognized and elicits and inspires a sense of elite technical performance, trust and forward-thinking fashion among an extremely savvy consumer.”
Famulak added that Spyder provides “strong building blocks from which to grow a far-reaching brand, and we are confident that between our expertise and resources, ABG’s vision and Spyder’s deep category understanding, we have a team that will enable Spyder to not only meet but exceed consumer expectations.”
ABG’s acquisition spree began a little more than a year ago with the purchase of Prince Sports in July 2012. That was followed by the acquisition of HMX Group in December. The HMX purchase added Hart Schaffner Marx, Hickey Freeman and Exclusively Misook to ABG’s portfolio of IP brands. In January, ABG acquired from the Schottenstein Luxury Group the Judith Leiber, Taryn Rose and Adrienne Vittadini brands. ABG’s portfolio also includes mixed martial arts brand TapouT and Marilyn Monroe, both acquired earlier.
And ABG isn’t finished. According to financial sources, the firm is still said to be chasing Juicy Couture, which is being marketed by Fifth & Pacific Cos. Inc., formerly Liz Claiborne Inc.
Salter declined comment on Juicy. He did confirm that ABG remains on the hunt for brands. The current four platforms are sports, men’s fashion, women’s fashion and celebrity. The company plans to add a fifth brand platform in media and entertainment in six months.
As ABG’s acquisitions move up the brand food chain from good to better and best, the partnership with LF USA suggests a new approach at fashion’s most powerful sourcing firm, this time with a greater focus on brands that have expansion potential globally. The two firms have a history of working together: LF USA has the license for TapouT.
According to Salter, ABG will also look for appropriate licensees for category expansion at Spyder, such as helmets, ski boots and socks.
Spyder, founded by David Jacobs in 1978 as a mail-order business, is based in Boulder, Colo., where it will stay, and there is no expectation of any changes with either operations or staffing. Tom McGann, Spyder’s ceo, said, “This will elevate and streamline our current business while opening the door to expand the brand’s reach into new markets.”
Apax acquired a majority stake in the alpine outerwear firm in 2004 for $100 million at a time when volume was likely in the $90 million range. Jacobs and his management team retained a minority interest at the time.
Market sources said Spyder has grown to about $250 million at retail.
Salter and Nick Woodhouse, president and chief marketing officer, have a broad-based vision for ABG’s acquisition strategy and overall plan for growing the company. Salter focuses on the financials, while Woodhouse does the consumer research. After the initial due diligence is done, the two compare notes and then hash out different scenarios with their team to determine whether an opportunity is worth pursuing.
ABG chased Spyder for three years, Salter said, noting that he knows the brand well due to his snowboarding and ski industry background, while Woodhouse is from the outerwear sector.
ABG also has as its partner private equity firm Leonard Green & Partners, which holds the majority stake in the brand management firm. According to Salter, having Leonard Green as ABG’s strategic financial partner means it can do any transaction, big or small, in the IP space. And the deals don’t have to be brands that are in bankruptcy or are losing money. “There has to be value creation where we can see significant upside either in category extension or territory expansion,” Salter said.
Woodhouse emphasized, “We look for brands that aren’t tarnished. And we look for brands that can be converted to a licensing [model] fairly easily.”
The cmo added that a key criterion is a brand that does well in its core markets and can also be translated overseas. Woodhouse said one question is asked of every brand under consideration: “If it doesn’t resonate globally now, will it be able to resonate globally in the future?”
ABG’s office has on its wall, “There are no rules here. We’re trying to accomplish something.” According to Salter, it’s a nod to an often repeated statement by Woodhouse and serves to remind staff that everyone’s input is important.
“We let people think here. This isn’t about Jamie’s or Nick’s invention. If someone has a good idea, we all get behind it and work it,” Salter said.