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Price War for Brookstone Heats Up With $56.4M Bid

Licensing Company Bluestar Alliance Wants to Keep 30-50 Stores Open or Pay a Penalty
September 17, 2018
Bluestar Alliance has made a $56.35 million bid for retailer Brookstone.



Some Brookstone stores may stay open after all, thanks to an emerging bidding war over the retailer of tech-focused gadgets and gifts that filed for Chapter 11 bankruptcy protection last month. Licensing company Bluestar Alliance has outbid a competitor to set the baseline bid for Brookstone’s auction later this month with a $56.4 million offer that stipulates it would keep 30 to 50 existing stores open or pay a hefty fee.

Bluestar, which focuses on women's fashion brand management and licensing, has received Delaware Bankruptcy Court approval for rights to set the floor price at Brookstone’s Sept. 26 bankruptcy auction with its recent bid after a series of competing proposals with rival Authentic Brands Group, a brand development and licensing firm, according to a Sept. 6 court document filed in the U.S. Bankruptcy Court for the District of Delaware.

Authentic Brands had made the first offer for the company with an initial $35 million offer then upped its bid to $50 million.
Brookstone debtors unsuccessfully asked the Bankruptcy Court to name that company as the top bidder over concerns that Bluestar would liquidate the company.

But in its most recent offer, Bluestar said it would keep 30 to 50 existing Brookstone stores open or pay a $400,000 penalty to Brookstone’s debtors.

In its bankruptcy filing, Merrimack, New Hampshire-based Brookstone said it would close all 101 of its mall stores and seek a buyer for its 34 stores located in airports across the U.S. It sells an array of items -- many designed for air travel -- including massage pillows and chairs, blankets, luggage and headphones. In its bankruptcy filing, Brookstone reported assets of $50 million to $100 million, but liabilities between $100 million and $500 million.

Brookstone had previously filed for bankruptcy in 2014 and was eventually sold to investors in China.

The company would be an unusual addition to Bluestar’s roster. It owns 15 women’s fashion labels, including Bebe, Tahari and Kensie, according to its website. The New York City company said it wanted to grow Brookstone’s presence in premium airport locations and wholesale channels as well as expand its e-commerce business. It said it also plans to aggressively license those brands in new and existing categories.

"We look forward to growing the brand through our financial restructuring and maximize the business both domestically and internationally," Bluestar Chief Executive Joey Gabbay said in a statement.

Bluestar’s bid is subject to higher offers in an auction for Brookstone’s assets scheduled for Sept. 26. Companies have until Sept. 20 to submit bids.

Brookstone said it expects the auction to be competitive.

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