Oaktree Capital Management LP is close to hiring AlixPartners LLP to advise on its efforts to take over Quiksilver Inc., according to people with knowledge of the matter.

As Quiksilver’s primary lender, Oaktree has the inside track on buying the company. However, the surf-wear retailer, which filed for bankruptcy in September, also contacted potential private-equity buyers, said the people, who asked not to be identified because the discussions are private.

Authentic Brands Group is actively looking at the assets, people with knowledge of those discussions said. Sycamore Partners, which controls Jones Group Inc., is among firms that spoke to the company, but it passed on a bid, people said. Golden Gate Capital, owner of outdoor clothing retailer Eddie Bauer, also had talked to the company, one person said.

AlixPartners will help Oaktree with research in bidding for the retailer’s assets and mapping out an operational plan, the people said.

Oaktree won court permission last month to provide $175 million of bankruptcy financing after it agreed to drop a $20 million breakup fee. Winning the financing put Oaktree in a commanding position to take over the Huntington Beach, California-based company when it emerges from bankruptcy around the end of January. 

Debt Swap

Representatives for Quiksilver, AlixPartners, Oaktree, Golden Gate and Sycamore declined to comment. A spokeswoman for Authentic Brands didn’t respond to messages seeking comment.

Under a proposal announced when Quiksilver filed for bankruptcy in September, senior lender Oaktree will swap its debt claims for a majority stake in the reorganized company. The company, which failed to pull off a turnaround begun in 2013, had been trying to overhaul an organization that was so spread out that it was hurting operations.

Quiksilver is the latest failed retailer in a changing landscape of the sector. Private-equity firms and distressed-debt investors have snapped up clothing brands like Wet Seal Inc. and Frederick’s of Hollywood Inc., as well as electronics chain RadioShack Corp., in bankruptcy sales.

Quiksilver’s $225 million senior unsecured notes maturing Aug. 2020 last traded at 8.5 cents on the dollar on Oct. 16, dropping 67.5 cents this year, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE