(Filed Under Financial and General Interest News). It is now likely that the online operations of Frederick’s of Hollywood, as well as inventory and shared revenue from future licensing and marketing opportunities, will be sold to Authentic Brands Group (ABG) early next month.
At the same time, a few more details have emerged about the claims of some of the lingerie companies on the list of the creditors in the recent Frederick’s bankruptcy.
The deadline for competing bids to the $22.5 million offer for Frederick’s by ABG has passed. And the bankruptcy court has canceled the auction that was to be held had other bidders emerged. Now a hearing will be held on June 3 during which the debtors will seek approval of the sale.
Frederick’s filed for bankruptcy on April 19 and has closed its remaining brick and mortar shops, while at the same time continuing to operate its online store. Several days before it filed, the lingerie chain had signed the deal with ABG, which was then subject to court approval.
The ABG philosophy, as outlined on its website, is to “elevate” the more than two dozen brands with which it works “through innovative marketing and licensing strategies.” The brands include Juicy Couture, Michael Jackson, Jones New York, Adrienne Vittadini, Airwalk, Tapout and Judith Lieber.
Under its deal with Frederick’s, ABG must share any future licensing and other types of revenue. “Immediately following such time as ABG receives $10 million in net brand revenue, ABG shall perpetually and immediately begin to pay FOH [Frederick’s] or its successor,” the agreement reads, “25% of the net brand revenue and 25% of other revenue.”
Several significant claims for money owed by Frederick’s have recently been added to a list maintained by bankruptcy attorneys. For example, Timex Garments of Sri Lanka filed a claim in the amount of $228,658.75. Angel Intimates, which lists a U.S. address in Sherman Oaks, CA, has filed a claim for $169,612.67. And Jolie Intimates of Canada filed four separate claims totaling $120,352.88. In all, there are about 40 creditors from the intimate apparel industry among the 6500 or so on the lists of creditors that Frederick’s filed with the court.
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