Authentic Brands
Brand licensing, from Ali to Elvis, Reebok to Ted Baker
Authentic Brands Group (ABG) is a brand development and licensing company headquartered in New York City. The company was founded by Jamie Salter, a seasoned entrepreneur and brand strategist. Salter has a background in acquiring, managing, and licensing consumer brands, and he has played a significant role in the success of Authentic Brands Group.
ABG specializes in acquiring and revitalizing iconic and well-known brands across various industries, including fashion, sports, entertainment, and lifestyle. The company focuses on building long-term value for its brands through strategic partnerships, licensing agreements, and collaborations.
Some of the notable brands in ABG’s portfolio include Marilyn Monroe, Elvis Presley, Muhammad Ali, Sports Illustrated, Nine West, Forever 21, and many others. The company is known for its ability to breathe new life into established brands, leveraging their heritage and popularity to create diverse and innovative product lines.
Under Jamie Salter’s leadership, Authentic Brands Group has become a major player in the brand licensing and management industry, working with a wide range of partners to extend the reach and appeal of its portfolio of iconic brands.
ABG now owns more than 50 brands, including Juicy Couture, Hervé Léger and Forever 21.
In 2022, ABG bought a majority stake in David Beckham’s brand management company DB Ventures for $269m (£200m) to drive growth in the EMEA and Asia-Pacific regions. ABG opened a European HQ in London. In March, ABG finalised its largest acquisition since 2010, buying Reebok from Adidas for $2.5bn (£2.2bn) and expanded its share in the sportswear market.
It also bought Ted Baker for £211m, turning the premium British lifestyle brand into a privately-owned company. By 2022 ABG generated £20bn in global retail sales annually and has more than 9,100 stores.
Authentic’s brand portfolio now includes Marilyn Monroe®, Elvis Presley®, Muhammad Ali®, Shaquille O’Neal®, David Beckham®, Dr. J®, Greg Norman®, Neil Lane®, Thalia®, Sports Illustrated®, Reebok®, Brooks Brothers®, Barneys New York®, Judith Leiber®, Ted Baker®, Hunter®, Vince®, Hervé Léger®, Hickey Freeman®, Frye®, Nautica®, Juicy Couture®, Vince Camuto®, Lucky Brand®, Aéropostale®, Forever 21®, Nine West®, Rockport®, Eddie Bauer®, Boardriders®, Quiksilver®, Billabong®, Roxy®, DC Shoes®, RVCA®, Element®, VonZipper®, Honolua®, Spyder®, Volcom®, Shark®, Tretorn®, Prince®, Airwalk®, Izod®, Jones New York®, Van Heusen®, Hart Schaffner Marx®, Arrow® and Thomasville®.
It continues to innovate with retail and celebrity brands, not just in terms of product development but physical stores too. Here’s a clip of its recent deal to feature Shein, the Chinese e-commerce giant, within its physical Forever21 stores, and drive footfall to its Simon shopping malls.
Excerpt from Jamie Salter interview with Drapers, January 2024:
Toronto native Jamie Salter launched New York-based conglomerate Authentic, also known as Authentic Brands Group, in 2010.
Authentic’s reach is undeniable. It owns more than 50 global brands and has recently swept up some of the most recognisable businesses in fashion retail including Reebok for $2.1bn (£1.78bn), Ted Baker for £211m, Hunter and the US’s Forever 21, alongside a $200m (£157m) majority stake in David Beckham’s brand management business DB Ventures – Salter counts Beckham, a shareholder in Authentic, as a close friend and business partner.
Despite the tough economic climate, Authentic’s acquisition trail continues in 2024. Last week, Authentic acquired US footwear brand Sperry from Wolverine Worldwide and rumours are circling that it will add Topshop to its roster this year by buying it from a beleaguered Asos.
Authentic licenses the brands it owns by segment. When Authentic buys a fashion business, it breaks it down by category or market and licenses these segments out to different suppliers, which Authentic then collects performance-based royalties from. Salter explains: “When we buy one company it may get broken up into 40 different partners around the world”. It has more than 13,000 franchise stores and 1,600 licensees in total.
The acquisition of Sperry has seen Authentic partner with Aldo Group to run Sperry’s design, production and distribution as well as lead its wholesale, ecommerce and store operations in the US.
Dividing up a business and outsourcing the different functions has been seen by many in the industry as a controversial practice. Outsourcing the Ted Baker business led to 200 redundancies in June 2023. However, the numbers are working for Authentic: global revenue in 2023 at the business was $29bn (£22.7bn) and further expansion is in the works. The business is opening a new head office in central London at the end of January, which will house its UK team of 75, alongside showrooms for its brands.
The new year will see Salter expand Authentic’s existing fashion businesses by introducing new categories, alongside setting his sights on more multi-million pound deals to grow the business. However the conglomerate is not immune to the wider economic environment and Salter expects to see a downturn as consumers continue to be hit with cost of living challenges and rising interest rates.
Salter began his career selling sporting goods and acquired Kemper Snowboards in the late 1980s. He then co-founded snowboard business Ride Inc in 1992 before stepping down in 1996 after taking the company public on tech stock market Nasdaq. Salter then co-founded financial services company Hilco Consumer Capital in 2006, a subsidiary of Hilco Global, before leaving in 2010 and launching Authentic.
Partnerships with fellow fashion retail giants are one way that Salter is growing Authentic. The business is working closely with Chinese fast fashion giant Shein. In August, SPARC group – which is a joint venture between Authentic and major US landlord Simon Property Group, acquired a minority shareholding in the Singapore-based etailer. Shein also acquired a one-third interest in SPARC Group.
Shein is now producing and selling Forever 21 products on its platforms. As part of the deal, Shein customers can return any product brought from the ecommerce to Forever 21 stores. Shein also has a series of permanent shop-in-shops at Forever 21’s 450-strong US store portfolio.
Salter says he watched Shein “very closely” as the business was “really effecting Forever 21”. He explains: “In 2021 [Forever 21] had this amazing year, right after Covid. Then starting in 2022 we saw our sales start to deteriorate and the more I looked into it, the more I saw that Shein was taking market share from us.”
Salter explains that he told Shein it was a “race to the bottom” in terms of pricing architecture, as Chinese competitor Temu began snapping at Shein’s heels. He proposed a partnership, as he said the Forever 21 brand resonated with US consumers far more than Shein, which attracted buyers only through affordable prices: “I said, you have to understand that the reason that people pay a higher price for a product is because that product has a heartbeat.
“If you give a choice to the consumer of Forever 21 or Shein at the exact same price, they will go for Forever 21 every time,” he adds.
The Shein return-to-store strategy began in early January and Salter predicts that it will “start off slow but pick up momentum.”
Meanwhile across the pond, Authentic has its eye on heritage British brands. It acquired Hunter’s IP in June 2023 after it fell into administration and will work with licensee Batra to expand Hunter’s apparel line in 2024. Batra operates Hunter’s production in the UK and Europe with footwear supply business the Marc Fisher Footwear Company at the helm of Hunter’s US operations. Salter adds that apparel “will start out of Europe and then move around the world”.
However having many licensees comes with its own challenges. After buying the struggling Ted Baker business for £211m in 2022, Authentic licensed its UK and European operations to Danish group AARC in 2023. However AARC needed additional capital to bolster its operations, leading Authentic to provided AARC with a short-term loan. In December AARC secured further funding from Secure Trust Bank Commercial Finance (STB CF) and Modella Capital to allow it to grow the Ted Baker business.
The Farfetch fallout has also impacted Authentic. Farfetch narrowly avoided bankruptcy after being plagued by falling revenue and profit, when South Korean retailer Coupang swept in with a last-minute rescue deal on 18 December. In February 2022, Authentic announced that was partnering with New Guard’s Group (NGG), Farfetch’s wholesale and licensing arm, to operate Reebok’s European wholesale operations and ecommerce. Salter says that Reebok accounts for between 30%-40% of NGG’s business and Salter predicts that NGG it will be sold this year, although he says Authentic is not interested in purchasing it.
Growth is on Salter’s agenda for 2024: “Bigger is better, globally is better – this is the company’s mandate,” he states.
Authentic will not confirm its quest for Topshop but Salter says “we’ve got our eyes on a pretty big deal”.
Salter is confident in Authentic’s licensing strategy and says the business is going “to continue to be careful, stick to our global [strategy] and continue to buy brands that stand the test of time”.
And what keeps him up at night?
“I think the economy slowing down is going to hurt us the same as it hurts anybody else. So that’s a good and a bad thing, as it makes things easier on the ‘buy’ side.”
Salter says businesses with debt will suffer with rising interest rates and that “there’s going to be a lot of pressure on big companies to unload some of their prime assets”.