Jason Rabin buys back Centric Brands as Blackstone, Ares and HPS exit

Jason Rabin, chief executive of Centric Brands, has completed a management-led buyout of the company, taking a majority stake alongside group president Jarrod Kahn. The new investor group is Axar Capital Management, M-Cor Capital LLC, MSP Sports Capital and Kahn himself. The deal closed on Friday.

The transaction ends the ownership of Blackstone, Ares Management and HPS Investment Partners, who took the company over when it emerged from restructuring in 2020. Rabin said the three firms had been with him since 2018 and supported the business fully, but that private equity is an investment with a natural exit.

"I wanted my company back," Rabin said in an interview at company headquarters in New York on 2 November. He described approaching friends and industry contacts, telling them he was looking to buy back his business and asking for support. The departing investors, he said, gave him the resources to do whatever he wanted.

Rabin has been CEO and a board member since the company's founding in October 2018, and he framed the buyout as continuity rather than a payday. "This is not about the money," he said. "This is about continuing to build a blue-chip company in this space." The management team stays in place.

Kahn, previously group president of accessories, said he looked forward to working with Rabin toward his long-term global vision. Jeff Moorad, chief executive of MSP Sports Capital, said the firm looks for exceptional leadership teams and is proud to join as the company continues to grow on the sports side.

Centric's portfolio spans men's, women's and kids' apparel, accessories and beauty, with more than 100 licensed and owned brands. They include Calvin Klein, Coach, Dockers, Faherty, Gap, Joe's Jeans, Michael Kors, Off-White, Quiksilver, Tommy Hilfiger, Ugg and Under Armour, plus entertainment names such as Disney, Marvel, Paramount and Universal.

A $3 billion business with global ambitions

Company revenue is more than $3 billion, and operations span North America, Europe and Asia. In New York the group keeps showrooms in the Empire State Building laid out like an upscale shopping mall, each brand in its own showroom designed to match its personality.

Rabin said priorities will not change under the new owners. Investing internationally, begun a few years ago, remains central: Centric now has offices in Milan, Amsterdam and London, and is moving into Asia, where it has more than 16 offices, mostly for sourcing.

In Asia the group will start building wholesale and distribution offices so it can take brands global. It keeps its three platforms: Centric Powered, Centric Ventures and Centric Collective. Esprit, which Centric launched a year ago, is the fastest-growing one, Rabin said, because it started from scratch.

The company sells from Walmart to Neiman Marcus, and Rabin credits that breadth. "Not every brand every day is going to do great," he said. Off-White, Hervé Léger, John Elliott and Jennifer Fisher are the brands at the highest department store level, and Centric also runs stores for Favorite Daughter, Joe's and Robert Graham.

With Fisher's jewellery, Centric provides the back-end financing, manufacturing and distribution while she handles social media, marketing and product. Manufacturing is mostly in Asia, along with Central America and Mexico, and the company makes no footwear except slippers. Rabin also sells to TJ Maxx, Ross, Burlington and Sam's Club.

Acquisitions, licensing and the Saks hit

On acquisitions, Rabin said he is selective. Hundreds of calls arrive every day, and he asks about a brand's distribution and purpose. A brand that competes with an existing one gets a no. Targets could run from $0 to $100 million in revenue, with an outdoor brand one example of white space.

Rabin distinguishes Centric from brand management firms such as Authentic because it makes no product there. He expects consistent deal flow from firms that acquire brands every day. He added that Authentic and other platforms look for larger deals, and that he has good relationships with them.

In entertainment the company focuses on character licensing, with Disney exclusives for sleepwear. It works with the NBA and NHL, works with Amazon and sells to arenas. Rabin said the Saks Global bankruptcy affected Centric, because Saks was a partner: "They helped us through it, but we definitely were impacted."

The company employs 2,600 people across 26 offices, and the staff remains the same after the deal. It has invested more than $25 million in global sourcing and operates distribution centres totalling 2.7 million square feet across California and New Jersey. AI is used on the back end and in design through Centric IQ.

Centric was formerly the publicly traded Differential Brands Group, acquired by Global Brands Group Holding in 2018 and renamed with Rabin as CEO. In 2020 it filed for Chapter 11 and emerged the same year under Blackstone, Ares and HPS, having eliminated about $700 million in debt.

Asked about a flotation, Rabin said it is not in the cards today, adding that it is great to be private in a fast-changing fashion industry. Jefferies advised management with Pryor Cashman, while Solomon Partners and Latham & Watkins advised the sellers. Centric Cares has logged more than 11,600 volunteer hours.

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Images: Jason Rabin Courtesy of Centric Brands; Courtesy of; Courtesy of Centric Brands