- Oaktree Capital Management is adding $150 million to its equity stake in WHP Global, taking Oaktree's total investment to $350 million.
- The latest capital raise gives WHP Global north of $1 billion in buying power.
- WHP Global, Authentic Brands Group and Marquee Brands are three companies that hunt for acquisitions among big name but struggling brands.
Brand management company WHP Global is getting another big investment as it looks for brands to rescue.
Oaktree Capital Management is adding $150 million to its equity stake in WHP Global, taking Oaktree's total investment to $350 million. The latest capital raise, in addition to a debt facility already in place with BlackRock, gives WHP Global north of $1 billion in buying power.
"Walk any mall, and you will see our acquisition targets," WHP Global chairman and CEO Yehuda Shmidman told CNBC. "Our aim is to rescue powerful, legacy brands in difficult situations."
WHP Global is one of several growing brand management companies, like competitors Authentic Brands Group and Marquee Brands, which hunt for big name brands struggling under the weight of a broken operational or financial circumstance. The goal, Shmidman said, is to unlock the value of a brand that is restrained under its current environment.
Given the current state of retail transformation, there may be a lot of opportunity to come.
These brand management companies do not own the branded goods themselves, but rather the intellectual property, or more simply, the name. It is an asset-light model, as brand managers employ other partners to manufacture and distribute the goods.
Authentic Brands Group has recently gone deal hunting in bankruptcy court. In late 2019, ABG acquired luxury department store chain Barneys' intellectual property, and fast-fashion retailer Forever21 in partnership with mall operator Simon Property Group and Brookfield Property Partners. In August 2019, BlackRock invested $875 million in ABG, about 30% of the brand management company.
WHP Global launched its business with the purchase of Anne Klein from Premier Brands Group last year for an undisclosed amount. Shmidman saw Anne Klein as strong brand inside a distressed parent company.
"We look for brands with a half a billion dollars or more in global sales volume, high brand affinity, high brand awareness, strong purchase intent by consumers — and the key is open opportunity for growth in digital channels and international global channels" Shmidman said. He is also the vice chairman of Tru Kids Brands, the company that now owns the new Toys R Us brands, and the former CEO of Sequential Brands Group.
WHP Global also announced Thursday it has closed its deal to buy the Joseph Abboud menswear brand for $115 million. Men's Wearhouse owner Tailored Brands will continue to sell and rent Joseph Abboud in certain categories in the U.S. and Canada, and it will continue to be manufactured in a Massachusetts factory. WHP Global plans to build the brand internationally and in new categories.
Anne Klein was the first brand WHP Global acquired, and since 2019, WHP Global has expanded the brand's distribution to China, India and Mexico. Together, Joseph Abboud and Anne Klein brands put WHP Global's gross merchandise value at $1.4 billion.
Shmidman said he remains on the lookout for new brands to buy. His company's focus is on fashion, but he's looking at home and housewares, too.
"If you know of a good one, let me know," he said.