Jessica Simpson wants to buy back clothing brand from Sequential Brands

Sales topped $500 million before the pandemic hit, but now the company that owns Jessica Simpson’s clothing brand is facing trouble.

Jessica Simpson is scrambling to buy back her clothing brand from a struggling licensing company that is in danger of filing for bankruptcy.

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.” His 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, plunged 38 per cent to $US17.02 ($A22.07) on Tuesday.

Sequential Brands bought a 62.5 per cent stake in Jessica Simpson in 2015 for $US117 million ($A152 million) from shoe and handbag brand Vince Camuto, which had originally bought it for $US15 million ($A19 million).

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Unlike other celebs who have launched clothing ranges, Jessica Simpsons brand has had staying power after beginning in 2005.

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 among 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 $US463 million ($A600 million).

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She started the brand with her sister Ashlee and mother and it now includes a children’s line, homegoods and footwear. Picture: Jamie McCarthy/Getty Images for Jessica Simpson Collection

On Friday, buyout firm KKR, a second-lien lender to Sequential, 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 sold another high-profile brand, Martha Stewart’s homemaking empire, for $US215 million ($A279 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.

This story was originally published on the New York Post and is reproduced here with permission