Authentic Brands Group has made billions in the last five years by buying up retail brands and turning them into licenses, allowing other companies to pay for the right to use the brands’ trademarks and copyrights.
Its latest acquisition, Sperry, is also going in that direction, the company said. Announced on Thursday morning, Authentic purchased the footwear brand known for its boat shoes and coastal aesthetic from its former owner Wolverine Worldwide for around $130 million. The deal came, like many Authentic deals do, as the brand in question has been struggling with declining sales. According to Wolverine’s earnings, Sperry’s sales dropped from $63 million in the first quarter of 2023 to $40 million in the last quarter, just over 10 years after Wolverine bought Sperry for over $1 billion from Collective Brands.
As part of the deal, Authentic will be following a strategy it’s taken with other brands in its portfolio like Vince and Reebok. Authentic will license the intellectual property of Sperry to its longtime partner, Aldo Group. Aldo, based in Canada and operating thousands of retail footwear stores around the world, will produce Sperry products, open and operate Sperry stores and aid global distribution of Sperry products to other wholesalers. Aldo similarly licenses other Authentic Brands like Brooks Brothers.
According to Aldo Group CEO David Bensadoun, Aldo has big ambitions for Sperry that will begin this year.
“We’re looking forward to adding 23 Sperry stores to the 430 other branded stores we operate in North America, as well as welcoming Sperry’s store employees to our team,” Bensadoun said in a statement. These stores will be added to the more than 40 existing Sperry stores across North America. “Our powerful operational structure for stores, wholesale and e-comm has been built over five decades, and we’re excited to put our deep experience to use right away elevating Sperry.”
This strategy has worked well for Authentic in recent years. In 2022, its licensing deals brought in more than $21 billion, according to the Global Licensors 2023 Report, making it the third largest licensor in the world after the Walt Disney Company and Dodtdash Meredith. In 2023, it added more brands and intellectual property to its portfolio including Vince and Hunter Boots, which it immediately began licensing. Licensing is an increasingly common business model for brands with name recognition but struggling sales, including Tom Ford which sold its license to Zegna in April of last year.
But licensing isn’t without its risks, including the potential that licensed products are mishandled, damaging brand reputation. To remedy that, Authentic has stuck to working with repeat licensing partners that prove effective like Aldo Group for brands like Sperry and Roxy, Warson Brands for DC Shoes, Shein for Forever 21, and Kidz Concepts for various children’s brand lines like Aeropostale Kids.
