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Party Is Over At Asprey

post #1 of 30
Thread Starter 
ASPREY BAILOUT

By BRADEN KEIL and SUZANNE KAPNER
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March 17, 2006 -- BELEAGUERED BRITISH BRAND IN TALKS TO BE SOLD
Financially troubled British luxury retailer Asprey is near a deal to be sold to a group of private investors, according to people familiar with the situation.

As part of that deal - which was reportedly being finalized last night, but could still fall apart - Asprey's New York flagship is to be closed, these people continued.

The 225-year-old jeweler signed a termination agreement yesterday with Donald Trump to opt out of its approximately $1 million-a-month lease for the 3-level space comprising nearly 30,000 square feet at Trump Tower.

Trump would not comment on the negotiations, but those familiar with the deal said it cost Asprey about $25 million to be let out of the remaining 17 years on its 20-year lease.

Jenny Swift, a spokeswoman for Asprey parent A&G Group, declined to comment.

Asprey had initially been looking for a $50 million investment to help fund further expansion. The discussions are believed to have recently turned to an outright sale of the company, along with sister brand Garrard.

Asprey's well-publicized troubles began soon after the venerable jeweler last changed hands. Silas Chou and Lawrence Stroll, who made a fortune as early investors in Tommy Hilfiger, bought Asprey and Garrard in 2000, part of a plan to create a luxury empire through their Sportswear Holdings, which also owns Michael Kors.

Minority investors, including the Bronfman family and Morgan Stanley, were brought on board to help fund an expansion that included flagship stores in New York and London.

Despite lavish spending - some $60 million went into the fancy buildout of the Trump Tower space, including $2 million to move a load-bearing column a few feet to relocate the entrance - Asprey failed to attract much of a following.

Fashion insiders said the brand, which had grown to include apparel, shoes and accessories, lacked an identity and turned off shoppers with its bland take on fashion.

The New York store, which after the buildout was about three times the size of a previous Asprey store in the same location, came to resemble a mausoleum, filled with high-priced items like $1,600 loafers, but few customers.

With the original group of investors tapped out, A&G hired Citigroup in June to seek additional financing for a continued rollout of stores in cities that include Dubai, Hong Kong and Moscow. Around the same time, the London flagship was sold for $96 million, though Asprey leases the space.

Even worse, actress Keira Knightley, who's on the company's payroll, chose to wear baubles from rival Bulgari to the recent Academy Awards ceremony.

Last week, The Post reported that the generally publicity-loving company pulled out of its agreement to decorate a table at an AIDS benefit.

Retail brokers said that Trump should have little trouble filling the space with tenants likely to pay more than what he was collecting from Asprey, given that retail rents near 56th and Fifth Avenue are commanding up to $1,000 a month per square foot.

"It's the primest of locations on Fifth Avenue. Trump should be able to rent that space with his eyes closed," said retail broker Jeffrey Roseman suzanne.kapner@nypost.com
post #2 of 30
Guess our haul from the sale is about to get even more exclusive. Or maybe there will be another sale? Pleeeeze!
post #3 of 30
Isn't the party just starting? Liquidation, everything must go!

As far as closing the NYC store, I don't think that should surprise anyone. Anytime you went in there, employees outnumbered customers by at least 5-1. And a strange, if nice-lloking layout for a retail shop. Just lots of open space, which probably wasn't being utilized effectively at 1 million dollars a month.
post #4 of 30
You know, I teach the field of business. The more I read and the more discussions I have with my colleagues, the more I realize just how many empty-headed business people there are out there...many with tens of millions at their disposal for layout. Yes, I realize this is New York City, but come on. The high-end market in ANY sector of business is very, very tough; this sounds like it was a risk that was just too big.
post #5 of 30
Quote:
Originally Posted by heavyd

Silas Chou and Lawrence Stroll, who made a fortune as early investors in Tommy Hilfiger, bought Asprey and Garrard in 2000,

Minority investors, including the Bronfman family and Morgan Stanley, were brought on board to help fund an expansion that included flagship stores in New York and London.

lavish spending - some $60 million went into the fancy buildout of the Trump Tower space, including $2 million to move a load-bearing column a few feet to relocate the entrance


What a motley crew, the Hilfiger boys(with $$ to burn and they did), the Bronfmans(who are suffering through a bad generation, investment-wise) and Morgan Stanley. Wait a minute, MORGAN STANLEY, they let this shit go down.
post #6 of 30
Indeed a sad news. I was thinking of the fantastic sample sale last month as an annual ritual for next 20 years. Be prepare for the final liquidating sale. I wonder what's left in its shoe department? I don't think there's any EG left.
post #7 of 30
Hopefully there's some outerwear left.
post #8 of 30
When one store falls another one takes its place. The retail world is one big hydra.

Jon.
post #9 of 30
What I can't figure out is why they are paying Trump to let them out of the lease. Why not just sublet the space?
post #10 of 30
There might be a clause in the lease that does not allow for sublessors. That or the fact that they would rather clean their hands of it (especially since they will have no other presence in the states) might make it easier for them to pay to get out rather than have a sublessor for the next 18 years.
post #11 of 30
We should band together and offer to buy out their entire menswear and shoe inventories at $.10 on the dollar. Who is with me?
post #12 of 30
Why doesn't Trump have contestants on The Apprentice run Asprey? "Your next assignment is to run a very classy jewelry store in Trump Tower. First team to make a sale wins."
post #13 of 30
Quote:
Originally Posted by aportnoy
We should band together and offer to buy out their entire menswear and shoe inventories at $.90 on the dollar. Who is with me?

I assume you mean $0.10 on the dollar (please correct me if this is a specialized finance term..). The way I read the sentence we'd only get 10% off of retail on their unsaleable $1600 loafers.
post #14 of 30
Quote:
Originally Posted by Duveen
I assume you mean $0.10 on the dollar (please correct me if this is a specialized finance term..). The way I read the sentence we'd only get 10% off of retail on their unsaleable $1600 loafers.


Beat you to it duveen...check my edit.
post #15 of 30
Quote:
Originally Posted by Ambulance Chaser
Why doesn't Trump have contestants on The Apprentice run Asprey? "Your next assignment is to run a very classy jewelry store in Trump Tower. First team to make a sale wins."

LMFAO.

And to make it a really entertaining show, they get Ernest in as one of the contestants and he has to sell a pair of $2000 brown croc loafers...

Jon.
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