Jessica Simpson is scrambling to buy back her clothing brand from a struggling licensing company that is in danger of filing for bankruptcy, The Post has learned.
The 40-year-old former pop singer and her mother, Tina Simpson, are working with boutique investment bank Threadstone to raise cash to buy back the Jessica Simpson Collection from Sequential Brands, a licensing firm whose executive chairman has stepped down amid chaos at the company, according to a source.
William Sweedler, who launched Sequential a decade ago, resigned as executive chairman over the weekend, according to a regulatory filing, to “pursue other matters.” Sweedler’s resignation, the filing said, “did not involve a disagreement with the company on any matter relating to its operations, policies or practices.”
Shares of Sequential Brands — whose other brands include Joe’s Jeans, Ellen Tracy and Caribbean Joe — were recently off 35 percent at $17.66 in Tuesday afternoon trades.
Sequential Brands bought a 62.5 percent stake in Jessica Simpson in 2015 for $117 million from Vince Camuto, which had originally bought it for $15 million. Sequential grew it rapidly, with yearly sales at retail topping half a billion dollars before the pandemic, according to a source close to the company.
Unlike a slew of celebrity brands that launched around the same time in 2005 and flamed out — including Mandy Moore’s Mblem line, Lindsay Lohan’s Leggings, 6126, and Miley Cyrus’ collaboration with Max Azria for a line at Walmart — Simpson’s brand has had staying power.
The Jessica Simpson Collection — a collaboration between the singer, her mother and sister Ashlee Simpson — includes a children’s line, home goods and footwear. It has been sold in retail outlets including Macy’s, Nordstrom and Dillard’s.
But while the “With You” singer has been actively promoting her line — most recently an ad campaign in September featured the entertainer with her daughters — financial problems at Sequential have been mounting as the pandemic has crushed business at department stores. Sequential recently reported a debt burden of $463 million.
On Friday buyout firm KKR, a second-lien lender to KKR, named Marjorie Bowen, a distressed retail expert and former managing director at investment bank Houlihan Lokey, to Sequential’s board, effective immediately — a move that insiders said looks like a preparation for a possible bankruptcy filing.
Sequential declined to comment on Tuesday.
Sequential sold another high profile brand — Martha Stewart’s homemaking empire — for $215 million in 2019 — mostly because the brand was costing the company more than it was worth, as The Post reported.
WWD first reported that Simpson is in talks with Threadstone to raise capital