Authentic Brands files to go public

Speaking of IPOs, Authentic Brands finally made it official. The company filed its prospectus this week, and is looking to raise $100 million (a placeholder figure that’s likely to change).

• The parent of brands like Aéropostale and Sports Illustrated is profitable and saw 2020 net income more than double to ~$211 million, from $72.5 million the prior year.
• Authentic Brands could be valued as much as $10 billion, Bloomberg reported in May.

Why now? The post-Covid consumer economy is going strong, and investors are looking for places to put their cash. In turn...

Stock up: Authentic Brands loves a fixer-upper, and an IPO will help the company execute more brand renovations. “They want to be capital-rich to pounce on opportunities when they see them,” Neil Saunders, managing director of retail at GlobalData, told Retail Brew. “You have to move fast. You see an opportunity, you get the brand quickly, and then you restructure. That's their whole model.”

• A short list of the brands ABG snapped up during the pandemic: Forever 21, Lucky Brand, Brooks Brothers.

Risky business: Authentic Brands’ asset-light strategy lets the company focus on managing the brands themselves and making gametime decisions, which has worked so far.

But...there’s always a but.

• “Should some of the brands start to wane, which brands do...the balance sheet could quickly look quite nasty,” Saunders said.—JG