Lucky Brand Dungarees, LLC Enters into Asset Purchase Agreements and Files Voluntary Chapter 11 Petitions to Optimize Operations and Pursue a Sale of the Company

LOS ANGELES, July 3, 2020 /PRNewswire/ -- Lucky Brand Dungarees, LLC ("Lucky Brand" or the "Company"), the Los Angeles based designer and retailer of iconic American denim and apparel announced today that it has entered into a stalking horse asset purchase agreement with SPARC Group LLC ("SPARC"), a leading global operator of lifestyle brands including Aéropostale and Nautica, for the sale of substantially all of the Company's operating assets. In connection with the transaction, ABG-Lucky LLC, a newly formed subsidiary of Authentic Brands Group LLC, a brand development, marketing, and entertainment company, which owns a global portfolio of entertainment, media, and lifestyle brands will acquire all the intellectual property assets of Lucky Brand. In addition to entering into the asset purchase agreement with SPARC, the Company and certain of its affiliates also entered into a "back-up" asset purchase agreement for the sale of the Company's and such affiliates' intellectual property and certain other assets to ABG-Lucky LLC which will only come into effect if the asset purchase agreement with SPARC terminates under certain circumstances.

To facilitate the sale and reduce its debt burden caused by recent challenges, including the COVID-19 pandemic, Lucky Brand has initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware. Lucky Brand has received new financing commitments from certain of its existing lenders that will provide sufficient liquidity to fund the business through the closing of the sale.

Lucky Brand will be operating its business in the ordinary course during the Chapter 11 process, and the vast majority of its stores, e-commerce platform, and wholesale business remain open to serve customers. During Chapter 11, Lucky Brand and its advisors will continue to explore potential sale transactions with other parties to achieve the highest or otherwise best offer for the Company. 

Matthew A. Kaness, appointed as Interim CEO in September 2019 and also Executive Chairman in January 2020, said, "The COVID-19 pandemic has severely impacted sales across all channels. While we are optimistic about the reopening of stores and our customers' return, the business has yet to recover fully. We have made many difficult decisions to preserve the Company's viability during these unprecedented times. After considering all options, the Board has determined that a Chapter 11 filing is the best course of action to optimize the operations and secure the brand's long-term success. We remain committed to our Associates, vendors, and business partners and appreciate the continued support through this process."

Lucky Brand has filed a number of customary motions with the U.S. Bankruptcy Court seeking authorization to support its operations during the process, including the authority to continue payment of employee wages and maintain healthcare benefits. 

For all media inquiries please contact: PR@luckybrand.com 

Additional Information
Latham & Watkins, LLP and Young, Conway, Stargatt & Taylor, LLP are acting as Lucky Brand's legal counsel, Berkeley Research Group is serving as its restructuring advisor, and Houlihan Lokey Capital, Inc. is serving as its financial advisor and investment banker. 

Additional information regarding Lucky Brand Dungarees, LLC's Chapter 11 filing is available at https://dm.epiq11.com/luckybrand or by calling the Company's claims agent, Epiq Global, toll-free at (855) 907-2103 (or at (503) 597-7674 for international calls), or by sending an email to LuckyBrand@epiqglobal.com.

About Lucky Brand
Founded in Los Angeles with a focus on heritage denim, Lucky Brand is a leading fashion designer and premium denim manufacturer in North America. Lucky Brand has embodied the independent spirit and lifestyle of Southern California for 30 years. Vintage-inspired jeans, broken-in graphic tees, classic leather motorcycle jackets, and bohemian styles all capture the laidback vibes and authenticity of Lucky Brand. Lucky Brand currently has approximately 200 locations in North America and is sold in select department stores and independent boutique retail locations. The Company also interacts with customers and offers its products through its direct-to-consumer website.

About Authentic Brands Group
Authentic Brands Group ("ABG") is a brand development, marketing, and entertainment company, which owns a portfolio of global media, entertainment, and lifestyle brands. Headquartered in New York City, ABG elevates and builds the long-term value of more than 50 consumer brands and properties by partnering with best-in-class manufacturers, wholesalers and retailers. Its brands have a global retail footprint in more than 100,000 points of sale across the luxury, specialty, department store, mid-tier, mass, and e-commerce channels, and more than 5,500 freestanding stores and shop-in-shops around the world. ABG is committed to transforming brands by delivering compelling product, content, business, and immersive experiences. It creates and activates original marketing strategies to drive the success of its brands across all consumer touchpoints, platforms, and emerging media. ABG's portfolio of iconic and world-renowned brands generates more than $12 billion in annual retail sales and includes Marilyn Monroe®, Elvis Presley®, Muhammad Ali®, Shaquille O'Neal ®, Sports Illustrated®, Dr. J®, Greg Norman®, Neil Lane®, Thalia®, Nautica®, Aéropostale®, Forever 21®, Juicy Couture®, Vince Camuto®, Herve Leger®, Judith Leiber®, Barneys New York®, Frederick's of Hollywood®, Nine West®, Frye®, Jones New York®, Louise et Cie®, Sole Society®, Enzo Angiolini®, CC Corso Como®, Hickey Freeman®, Hart Schaffner Marx®, Adrienne Vittadini®, Taryn Rose®, Bandolino®, Misook®, Spyder®, Tretorn®, Tapout®, Prince®, Volcom®, Airwalk®, Vision Street Wear®, Above The Rim®, Hind®, Thomasville®, Drexel® and Henredon®.

For more information, visit authenticbrandsgroup.com.
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About SPARC Group
SPARC Group LLC ("SPARC") is a global enterprise which designs, sources, manufactures, distributes, and markets women's, men's, and kids' apparel and accessories. A full-service retail operator, SPARC delivers product and commerce innovation through a multi-brand platform which supports 2,600-plus retail doors and shop-in-shops, robust eCommerce, and leading wholesale accounts in North America, South America, Europe, and Asia Pacific. As the dedicated operating partner for the Aéropostale and Nautica brands, SPARC supports over $2.7 billion in global retail sales annually.

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