The hip hop mogul sold off most of Sean John to the apparel giant Global Brands Group in 2016, but GBG’s U.S. unit filed for Chapter 11 bankruptcy this summer, citing losses during the COVID-19 pandemic. And on Wednesday, the GBG unit that controls Sean John filed its own bankruptcy petition.
That new filing included standard bankruptcy information – total assets and debts, key creditors, and so on – but also one notable nugget: That SLC Fashion LLC, a company associated with Combs, was seeking to buy the Sean John brand for $3.3 million.
Diddy’s proposal is what’s known in bankruptcy law as a “stalking horse bid” – an agreed-upon early offer to buy assets out of bankruptcy at a pre-set price. The procedure typically affords a buyer like Diddy certain advantages, in return for guaranteeing Global Brands a minimum price for the sale.
Now that the petition has been filed, other bidders will have a chance to offer a higher price than Diddy for the right to buy Sean John. Such bids are due by Dec. 15. Creditors could also file a motion with the bankruptcy court objecting to the sale.
Diddy launched Sean John in 1998, eventually building to annual retail sales of around $450 million in 2016, according to Women’s Wear Daily. But that year, Diddy sold a 90% stake in the company to Global Brands, calling it a partnership that “provides us the opportunity to reach the Millennial customer on a global level.”
The relationship had soured by 2021, when Diddy sued Global Brands for trademark infringement over its use of his “Vote or Die” slogan. He said the phrase rightly belonged to him, and that using it with Sean John was meant to imply that he was still in control of the brand.