Saks Global and the Authentic Brands Group are forming a joint venture to grow luxury brands, WWD has learned.
The new venture, called Authentic Luxury Group, will initially focus on Authentic Brands-owned luxury and accessible luxury names including Barneys New York, Judith Leiber Couture, Hervé Léger and Vince.
The principals of the Authentic Luxury Group touted several ambitious plans and aspirations, such as rolling out Barneys retail locations or in-store shops, adding categories to existing fashion brands in the Authentic Brands portfolio and widening their distribution in the U.S. and abroad, and purchasing brands. Essentially, the new luxury group plans to serve as an incubator for brand growth through strategic licensing agreements and distribution channels across fashion, retail, digital, hospitality, real estate, art and travel, according to the joint venture.
“We’re creating a luxury version of Authentic Brands that’s half owned by Saks Global, half owned by Authentic Brands,” Richard Baker, executive chairman of Saks Global, told WWD. “This will be a new venture for Saks Global.”
Richard Baker
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Saks Global includes Saks Fifth Avenue and Saks Off 5th stores and websites, as well U.S. real estate holdings and investments. Authentic Brands is a brand development, marketing and entertainment platform with a portfolio including Shaquille O’Neal, David Beckham, Sports Illustrated, Marilyn Monroe, Elvis Presley, Muhammad Ali, Reebok, Frye, Aéropostale, Forever 21, Nine West and Eddie Bauer, among others.
“Jamie and I just got back from a nine country tour where we were both traveling together and on our own for over 24 days, and meeting with some of the top retailers, vendors, partners and distributors around the world,” Baker said, referring to Jamie Salter, the founder, chairman and chief executive officer of Authentic Brands.
Those meetings apparently provided some assurances to the principals of the Authentic Luxury Group that it will be able to fulfill its mission. “We’ve been speaking to a lot of partners around the world, and they’re all very, very supportive of this transaction,” Salter said. “It’s not like we just went out and said, let’s just do this, right? We’ve been talking about it for a year.” Many of those partners are distributors and retailers of the brands that Authentic Brands owns, and operate in Thailand, Korea, Japan and other countries. Authentic Brands has 3,500 full-price stores, 1,500 outlets, and 8,000 shops-in-shop worldwide. They’re all licensed.
“When you look at our distribution, almost 50 percent is done through those stores. The other 50 percent is done on a wholesale basis at about 400,000 points of sale around the world,” Salter said.
Jamie Salter
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“Saks Global, working with Jamie, could have Barney stores or Saks stores in the Middle East, China and Korea and all over the globe, because he already has the network in place for us to begin the conversation,” Baker said.
The former Barneys flagship on Madison Avenue closed for good in February 2020, but the Authentic Luxury Group has no plans to reopen the flagship.
“With all the different brands that Authentic Brands Group bought — Champion, Billabong, Reebok — the list goes on and on — we’ve done a really good job servicing that mid-tier on a global basis,” Salter said. “But luxury and affordable luxury is a tougher space. We’ve dabbled in that business. We own Ted Baker, Brooks Brothers, Judith Leiber, Vince, Herve Léger. So when you look at our portfolio, it’s always about distribution, distribution, distribution. You need great distribution to sell your brands…With our international ties around the world, and obviously with the relationship we have with Saks, and with Richard’s potential future acquisition [of the Neiman Marcus Group] we believe we could build something very, very strong,” Salter said. “We’re going to really expand the categories in these brands because we have support from a retailer to support those new categories. We haven’t had that support in the past. Now it’s in Richard’s interest to help build these brands because he will share in the royalties that come in around the world. He has a pretty big interest in helping us build Herve Léger beyond just great dresses,” Salter said, citing one example of what the joint venture could do.
Saks and Authentic Brands have a relationship that goes back to November 2019, when Authentic Brands finalized a $271 million deal to buy Barneys out of bankruptcy and eventually opened a Barneys shop inside the Saks Fifth Avenue flagship in Manhattan. All the Barneys stores in the U.S. were liquidated, but Barneys lives on, currently with ten licensed stores in Japan, a Barneys men’s store in Greenwich, Conn., a Barneys beauty and fragrance store in South Korea, and with the space inside Saks. A Barneys pop up opened Sept. 5 on Prince Street in Manhattan for a five-week run. Baker spoke of the possibility of opening Barneys stores in South Korea, China and other countries as well as creating Barneys-branded products, including accessories, shoes and home goods, “a full lifestyle brand offering of Barneys product,” developed through Authentic Luxury Group.
“It was very eye opening for Richard when we went to Japan, because 30 percent of what’s in those Barneys stores is Barneys product,” Salter noted.
With the Barneys agreement formed a few years ago, “We sort of tested each other from a relationship standpoint, and obviously we do like each other,” Salter said. “With what Richard going down the road will acquire, we figured that it makes a lot of sense to form a much longer-term partnership with Saks Global. Richard has big aspirations, and I don’t believe he’s stopping at the acquisition that he’s doing now. He’s going to continue to grow his empire around the world,” Salter said.
Baker said Barneys is now co-owned by Authentic Brands Group and Saks Global, with Saks having a minority stake. Originally, it was a licensing deal. About three months ago, Barneys New York Residences for luxurious vacation stays opened in Tulum, Mexico.
An Herve Léger dress.
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Asked how the Judith Leiber, Herve Léger and Vince brands could grow, Baker replied: “Those could be full lifestyle brands that could sell their product at Saks or any of our department stores or offprice stores. They could be sold globally, just like you see any luxury brand sold.” Leiber is known for whimsical, pop culture inspired novelty handbags, while Herve Léger has its iconic bandage dress, and Vince focuses on its own California-inspired laid-back sophistication.
The timing of the new venture is interesting given the luxury sector is slumping and Saks Global is in the process of buying the Neiman Marcus. “This is something Jamie and I have been talking about for a long time, and as Jamie said, this is a great opportunity for us to launch luxury and aspirational luxury brands across the world,” Baker said. “We’ve already started with Barneys. This is just a continuation and a growth off of what we’ve been working on.
“For the luxury brands that we’re going to be working together on at [the Authentic Luxury Group], the opportunities are huge,” Baker said. “I got to see first-hand, traveling with Jamie, the opportunity in places like [South] Korea, Thailand, Japan and India, and these are all places that we’re going to be opening up Barneys stores, and launching product, and we’re going to be doing big business in these markets with very strong local partners.
“As we acquire new brands, and as we grow the existing brands in the portfolio, we will be able to distribute them, not only within our department stores and in our digital network, but we’ll be able to distribute them globally,” Baker said.
“We do think that we’re going to be able to build a multi-billion dollar platform over the next five years,” Salter contended. “We’re taking the Authentic playbook and applying it aspirational and luxury brands.”
Along with its intentions to grow Barneys, Judith Leiber Couture, Hervé Léger and Vince, the Authentic Luxury Group intends to advance Saks Off 5th, as well as Iconic Images, Authentic Brands’ art business. “We own a ton of copyright in the art world,” Salter said. Last month, Saks started to sell art and unveiled a fine art collection of more than 100 limited-edition contemporary prints.
Salter added, “A number of our partners around the globe want Saks Off 5th.” He mentioned Poland.
The joint venture could also open up some options for Bergdorf Goodman, which is part of the Neiman Marcus Group. Hypothetically speaking, Salter said, “You may see a Bergdorf condo hotel.”
