NEW YORK — Authentic Brands Group is “taking a breather” in its ongoing negotiations to buy the John Varvatos brand, but its chief executive officer is hopeful that a deal can eventually be completed.
Jamie Salter, ceo of ABG, told WWD, “We love the brand, we think it’s great. There were just some issues we couldn’t work through.”
Sources say that includes working with existing licensees and negotiating severance packages.
Although Varvatos is losing a reported $ 15 million a year, ABG operates under a licensing model and if it strips the overhead from the brand, it can be economically viable.
Varvatos, which has reported sales of $ 325 million at retail, can be profitable if operated under a “consolidation model,” Salter believes. But if a deal cannot immediately be worked out, he said ABG will work with Varvatos’ majority owner, Lion Capital, to expand the label, both in the U.S. and overseas.
Salter stressed that Lion is also a part owner of ABG, with a 21.5 percent stake, so “the seller is also the buyer. So they have to be happy with the deal we make.”
“If can get everything worked out, we’ll do the deal. If not, I’ll will help my partner make John Varvatos do well,”
Follow WWD on Twitter or become a fan on Facebook.