Over the past 15 years, Authentic Brands Group has gone from being one of Jamie Salter’s many ideas to the world’s second-largest licensing business behind Disney, with brands that generate $32 billion in retail sales annually.
So when Jean E. Palmieri, WWD’s senior editor of men’s, had Salter on stage at the WWD Apparel and Retail CEO Summit, she began at the only logical starting point.
“How’d you do it?”
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Salter, who is founder, chairman and chief executive officer of the New York company, said he kicked off Authentic with a business plan inspired by big tech — and stuck with that plan.
The idea was fairly simple.
“We’re going to be an asset-like model, and we’re going to build the business, really as a software company in the old economy,” he said of the early thinking that led to Authentic.
“When we first started out, it was a small company, but we built it with a technology platform and not necessarily the fashion business,” he said. “We looked at it very differently than you would typically look at it from a fashion standpoint, because we never made anything. We had to go find the greatest partners in the world.”
Licensing wasn’t a new concept. Iconix Brands Group pioneered the approach in the prior decade, piquing the interest of Salter, who iterated on the concept.
“When we really looked and we studied their business model, we thought their business model was flawed,” Salter said of Iconix. “Their business model was based on really selling a category at the retailer,” particularly to mass market retailers like Target.
Authentic went bigger, buying brands, linking with producers and selling goods across multiple categories and in a range of retailers.
What started with a deal to buy the Tapout brand led to the company to acquire the intellectual property of Marilyn Monroe, then Brooks Brothers, Ted Baker, Quiksilver, Reebok and many, many more.
Authentic’s latest deal — set to close in the fourth quarter — will give the company a 51 percent stake in the Guess brand.
That will bring the company’s brands to about $38 billion in retail sales, with Salter projecting a 30 percent compounded annual growth rate over the next five years.
“That’ll take us close to $50 billion,” he said.
But to get to Salter’s goal of $100 billion in annual retail sales, Salter said, “We have to make big acquisitions, somewhere between sort of $5 billion and $10 billion.”
And even though acquisitions that big in fashion are few and far between, he said there are plenty of deals to be done.
“There’s a lot more than you think when you actually start looking around the world because the world’s a big place,” Salter said. “Whether we’re buying a company in Europe or we’re buying a company in the United States, there are plenty of companies to buy, but we are now looking all over the globe.”
That puts Salter at the center of fashion’s dealmaking universe — and always at the center of the industry rumor mill.
“People say my name on every deal,” he said. “They like to get me excited and hope that I’m going to pick up the phone and I’m going to call and say, ‘What’s going on?’”
Authentic, for instance, had been seen as the top contender to buy Marc Jacobs from LVMH Moët Hennessy Louis Vuitton, but sources said negotiations for that deal fell apart last week.
When brands get bought by Authentic — or any of its brand management competitors — they almost always make a step change in their business model, shedding production capacity and other hard assets to focus on licensing.
That’s led to a perception among some that the brand management model is for brands that are already done-in.
Salter disagrees.
“We don’t buy distressed brands,” he said. “We buy distressed companies. Big difference. The brands are not broken. The model is broken. Do they have too many retail stores? Do they have international distribution? How’s the e-commerce business? Do they have a proper wholesale strategy?”
He pointed to Reebok, which Authentic bought for $2.5 billion in 2023, as an example.
“Adidas wanted to sell Reebok, not because Reebok was a bad brand,” Salter said. “But if Reebok wanted to go into the basketball business … Adidas said, No, you can’t go into the basketball business. Why? Because Adidas wanted to sell basketball shoes. Adidas actually grew their business substantially over the 15 years when they owned Reebok, but they actually did it at Reebok’s expense.”
Now, he said, Authentic is letting “Reebok be Reebok,” getting back into sport with big brand gains.
“We’ll do $6 billion this year, up from $3.7 billion three years ago,” he said of Reebok.
And Salter plans to keep that going.
The brand signed a lifetime contract this year with NBA star Allen Iverson, who was known for wearing Reebok and Champion, another Authentic brand. The former Philadelphia Sixers MVP was featured last month in a three-part documentary on Amazon.
Salter described the documentary as a “Reebok commercial” — one that was produced, of course, by Authentic Studios.
The documentary highlights an often underappreciated part of the Authentic model.
“Entertainment for us, that’s the driving force,” Salter said. “It keeps us young for starters, but what the entertainment business does is — if you really look at Disney, who we like to model from, Disney for me is one of the most successful corporations and companies around, but they’re also the number-one licensing company in the world. We’re number two, but have a long way to get to number one.
“Disney’s a content company first,” he said. “They make these great movies; after they make these great movies, you get in your car and you drive to Disney World or Disneyland and you have a great experience. And after you have a great experience, you go into the store. You can’t get off the ride without going through the store and you buy a ton of merchandise.”
Salter said Authentic sees “huge spikes” in its business when “content” like the Iverson documentary drops.
And that’s a game that he said more companies can play.
“Everyone can get into the content business now because AI is allowing you to get into the content business,” Salter said. “Content drives commerce, and I’m going to continue to tell everyone that because today without the 700 million social media followers [Authentic’s brands have], we would never be able to drive as much content through our platform.”
He said Authentic could take video of the on-stage interview and send it out around the world in 150 languages just 15 minutes after the last question.
“Can AI replace jobs? That’s what everyone’s worried about,” Salter said. “The answer is yes, but you still need people to operate AI. You’re just going to become that much faster and that much better at what you do. Don’t be scared about AI. Make sure you embrace it. Get all of your people to start working with it. It is unbelievable how good AI is, and yes, it’s going to change our world.”
Salter seems pretty set with his world the way it is, but there could be more changes for the company, which has become a perennial IPO candidate.
When questioned about a potential offering, Salter asked for a show of hands of how many CEOs in the room were both happy and publicly listed.
“It’s not a happy place for most CEOs,” he said. “So my investors would tell you, Jamie, one day we’d like you to go public. [But] there’s no real reason for us to go public other than maybe ring the bell, which will make me really happy. I don’t know. Maybe we’ll go public in the next couple of years. That’s what we’re telling people, but maybe we won’t.”