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You know how taxidermy works? (Stick with us!)
After an animal dies, its exterior might look the same, but the insides get filled with fluff.
Turns out that’s kinda what happens to bankrupt businesses, per NPR. Many familiar retailers have gone bankrupt, but their brands live on, powered by new firms.
We’ve seen it happen many times, whether we noticed it or not:
- Forever 21 filed for bankruptcy in 2019 before being sold for parts and bought in 2020 by three companies.
- RadioShack went bankrupt in 2015 and has since changed hands 2x.
- Pier 1 Imports shuttered its brick-and-mortar stores after going bankrupt in 2020, but its ecommerce site lives on.
When companies go under, their intellectual property (e.g., branding, customer data, product designs, domains) goes up for sale.
And while it’s sometimes rival brands that buy a bankrupt biz — Nike bought Converse, and Overstock scooped up Bed Bath & Beyond — there are specialized firms making a big business on doomed retailers.
For example…
Authentic Brands Group owns 50+ clothing labels — many of which went bankrupt or came close — including Quiksilver, Brooks Brothers, and Barneys.
- The company doesn’t handle any of the typical retail operations, like managing stores, inventory, or manufacturing.
- Instead, it buys a bankrupt brand’s IP, sells the licensing rights, and rakes in royalties.
It also makes money. It filed $489m in 2020 revenue and was recently valued at $20B.
Even wilder: Brands aren’t the only thing Authentic Brands Group is bringing back from the grave. The company also owns the likeness rights of celebrities like Elvis Presley and Marilyn Monroe — and its next stop might be the silver screen.
