Saturday, December 2, 2023

Bankrupt Scotch & Soda Acquired by Bebe, Tahari Owner

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Dutch denim-focused fashion brand Scotch & Soda will soon be under new ownership.

Bluestar Alliance on Monday announced plans to acquire the Amsterdam-based brand after it filed for bankruptcy in its native Netherlands last week.

“Bluestar continues to strategically build its portfolio and we see Scotch & Soda as a unique fit, widely known for its roots in Amsterdam and celebrating self-expression with a modern twist on timeless fashion pieces,” said Joseph Gabbay, CEO of the New York brand management company, which owns Hurley, Bebe, Tahari, Nanette Lepore, Catherine Malandrino, Kensie, Justice, Limited Too and English Laundry.

Bluestar chief operating officer Ralph Gindi said Scotch & Soda “sits on its own and attracts a younger fashion-conscious consumer who appreciates fine craftmanship and attention to detail.”

 “Our goal is to continue Scotch & Soda’s luxury retail distribution strategy, while also introducing the brand to more trendsetters, especially those looking to express their personality through their clothing,” Gindi added.

Scotch & Soda was owned by private equity investor Sun European Partners, an affiliate of Boca Raton, Fla.-based Sun Capital Partners, which acquired the brand in 2011 wouldn’t cough up any more money to keep the company afloat.

The bankruptcy didn’t affect any of the company business outside Netherlands. Scotch & Soda’s managing director Frederick Lukoff, who joined in 2019 after a decade as president at Stella McCartney, stepped down after the filing.

Coming out of Covid, Scotch & Soda began rapidly expanding in 2021. Last year, it had plans to open 20 global brick-and-mortar stores. Scotch & Soda’s new “free spirit” store concept features design elements and sustainable features including LED lighting, FSC-certified wood herringbone flooring and hangers made from recycled materials.

Scotch & Soda operated 252 stores when it filed for bankruptcy and is stocked in 7,000 retail doors.

The brand last June tapped Stichd, a division of Puma Group, to produce and distribute Scotch & Soda’s underwear and sock collections. And in December, it inked a license with Bos Group for the production and distribution of footwear collections for men, women and kids.

A 2021-2022 Impact Report indicated that the brand’s environmental damage rose 36 percent for the reporting period, or environmental damage totaling 47.1 million euros ($48.68 million) when compared to the prior year. Scotch & Soda vowed to work on improving its impact this year.

Terms of Bluestar’s deal, which should be finalized in the coming week, were not disclosed, and the transaction is still subject to the standard closing conditions.

“We have seen quite some interest from parties to acquire some of the bankrupt assets. The proposal of Bluestar Alliance was by far the best deal for all stakeholders involved,” said Jasper Berkenbosch, an attorney at Jones Day and trustee of the bankrupt estate.

“This is good news for quite a large group of employees at Scotch & Soda, even if, unfortunately, not all employees can be kept on board,” added Erik Schuurs, a co-trustee of the Scotch & Soda estate.

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