Retail Acquisitions Paused Amid Coronavirus

A number of brands were being pitched to potential buyers and investors as the coronavirus pandemic took root in the U.S., according to multiple sources, but those processes have largely been put on hold. That's not surprising with retailers in survival mode, focused on conserving cash as the spread of the coronavirus hits consumers' pocketbooks. MeUndies, Saxx Underwear, Tommy John and NYDJ were all up for grabs, according to sources familiar with the talks who spoke with Adweek on the condition of anonymity because of the private nature of those talks.[article_summary section="1"] None of the companies responded to requests for comment. NYDJ, which has been on the auction block for several months, has yet to announce a buyer. A source familiar with NYDJ's situation said Mudrick Capital, which held a majority of the denim brands' term loan, would likely bide its time until retail returns to some state of normalcy. Adweek previously reported that the denim brand was up for sale. The company was among credit rating agency Fitch's loans of concern. Sources also said MeUndies, Tommy John and Saxx were attempting either a sale or to attract a major investment to continue to grow the business. But those processes have all been pulled, sources said. Likewise, those brands are focused on their operations and will likely wait until the economy stabilizes. A source familiar with MeUndies', Tommy John's and Saxx's situations said all three are seeking lofty valuations that are unrealistic in the current environment. A separate source, however, said deals for men's apparel brands are still being floated and that it wouldn't be shocking if one ends up crossing the finish line. An industry banker noted that while mergers and acquisitions are largely on hold, there are a number of cash-rich private equity firms putting out feelers for reputable brands in need of cash. Perry Ellis, for example, is a potential acquisition target, a source told Adweek. But the apparel company is more likely to restructure its debt to buy it more time. The Feldenkrais family and Fortress Investment Group took the company private in 2018 for more than $400 million, which was financed in part by debt. Perry Ellis did not respond to a request for comment. Saxx, meanwhile, received an investment from private equity firm Brentwood Associates in 2016, which invested $50 million, according to reports. MeUndies was projected to have some $75 million in revenue last year, according to CNBC. The company was founded in 2011 by CEO Jonathan Shokrian. In addition, Tommy John was projected to have $100 million in annual sales by 2018, according to CNBC. The company was founded by Tom Patterson, its CEO, and Erin Fujimoto, its head of merchandising.

Coronavirus

NYDJ, Saxx, MeUndies and Tommy John Were Looking for Buyers—and Then the Pandemic Hit

A number of brands were pursuing a sale or investment before the coronavirus

Richard Collings

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Richard Collings