A bankruptcy judge signed off on Gordon Brothers’ $3 million purchase of teen retailer Wet Seal LLC’s brand name after a competitive auction.
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court in Wilmington, Del., on Friday authorized the Boston-based company to purchase Wet Seal’s intellectual-property assets, including trademarks, a website and domain names, according to court papers.
Its plan for Wet Seal is “to rebuild and reposition the brand” for the future, Gordon Brothers said Friday in a statement.
Gordon Brothers beat out two rival bidders at Thursday’s auction, including YM Inc., whose $1.5 million offer set the floor price for the assets. Court papers say the auction went through 20 rounds of bidding before YM, a Canadian apparel company, dropped out at $2.95 million.
Wet Seal is selling its brand, as well as the Arden B, Blink and Chic Boutique brands, after failing to find a buyer or investor to keep its brick-and-mortar presence alive. The company began closing its stores in late January and filed for chapter 11 protection on Feb. 2 to complete its liquidation.
Gordon Brothers has been no stranger to retailer bankruptcy auctions, although it often appears as a liquidator seeking the right to run store-closing sales in exchange for a cut of the proceeds. Last year, for instance, it was among the liquidators that won the right to oversee going-out-of-business sales for Sports Authority Holdings Inc.
A separate division of Gordon Brothers is focused on branding. It bought the Sharper Image brand out of its bankruptcy and currently owns the Polaroid brand.
Brand names can be valuable assets even as the companies associated with them close stores and go out of business.
This year alone, four liquidating retailers have collectively nabbed millions of dollars for their names as their brick-and-mortar presence disappears.
A bidding war for Limited Stores Co.’s brand name concluded last week, with private-equity firm Sycamore Partners’ $26.75 million bid prevailing over Sunrise Brands LLC.
Earlier this year, Gildan Activewear Inc. paid $88 million for American Apparel’s brand, part of a $103 million deal that saw it pick up other assets.
And the millennial-focused online retailer Nasty Gal Inc.’s brand name was sold to U.K.-based rival website Boohoo.com for $20 million in early February.