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Simon Property venture buys Brooks Brothers for $325M

Yahoo Finance's Brian Sozzi and Alexis Christoforous discuss the Authentic Brands-Simon Property venture to buy Brooks Brothers.

Video Transcript

BRIAN SOZZI: Authentic Brands [INAUDIBLE] Simon Property Group this morning-- the dynamic duo has agreed to buy bankrupt Brooks Brothers for $325 million. Ines, that's a lot of money for a company that has lost a lot of customers the past five years.

INES FERRE: A lot of money, and this is a venture that's backed by Authentic Brands. It's backed by Simon Property. I have the ticker of Simon up right now. And this is part of an agreement to buy the company, Brooks Brothers, which had filed for Chapter 11 not too long ago and keep 125 of its 200 US North American stores open. There's going to be a hearing to approve this that's scheduled on August 14. And the deal is expected to be completed by the end of the month.

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Now, you may think, yes, that's a lot of money for Brooks Brothers. But there had been even a competition to buy a Brooks Brothers. You had WHP Global, which buys struggling brands and revives them and gets rid of their unprofitable locations. And WHP had reportedly made a bid to buy Brooks Brothers. But Brooks Brothers believed that this one from Spark-- that's the venture-- was a better deal. So Brooks Brothers had, again, filed for bankruptcy earlier and had been hit, though, because of the pandemic.

But also over the years, it has been really hit because of this trend of going to a more casual look, as men are dressing down more. And this pandemic was really the nail on the coffin as people just didn't go to the office. So you can see where the trend was going and what happened because of the pandemic. And who knows when people will be going-- men will be going back to the office wearing their suits full force the way they had done before. It was already a trend that was declining more towards the casual.

BRIAN SOZZI: Yeah, Alexis, to be honest, I fall asleep every time I walk past Brooks Brothers. The stuff has just gotten too boring. But you know, you're really seeing an interesting trend within Simon Property Group. In addition to the Authentic Brands tie up, they're also still reportedly trying to turn JCPenney and Sears stores into Amazon fulfillment centers.

INES FERRE: Yeah, that's right. They are trying to turn them into Amazon fulfillment centers. It'll be interesting to see, because, really, Simon Property with these malls-- it won't necessarily attract traffic to the malls. And other tenants, other stores in those malls may take issue with that with having Amazon fulfillment centers there. But we'll see what happens you have to do something with that space.

BRIAN SOZZI: So very true. Ines Ferre, thanks so much.