Former Gap CEO Art Peck Launches SPAC, Targets Fashion Brands
Earlier this week, former Gap Inc. CEO Art Peck filed with the Securities and Exchange Commission to raise money for a special purpose acquisition company (SPAC). Peck’s SPAC, Good Commerce Acquisition Company, plans to buy companies that sell apparel, accessories, home goods, among other products.
"Our objective is to create a next-generation consumer holding company by combining exceptional brands and leadership teams in the apparel and accessories, outdoor, health and wellness, home, and other consumer-related industries to create long-term value for our shareholders,” Peck wrote in the filing.
Total Retail's Take: SPACs, which are founded to gather funds in order to buy or merge with other companies, have become a hot Wall Street trend. In the first two months of 2021 alone, 175 SPACs have gone public according to data compiled by Goldman Sachs — roughly five deals per trading day. If that pace continues, the investment bank estimates that this year's offerings will exceed the total number of SPACS in 2020 by the end of March.
Peck apparently seeks to target fashion and apparel brands, many of which have struggled during the pandemic to replace lost in-store sales, even with the surge in online shopping. He's surrounding himself with others familiar to the apparel market, including Abinta Malik, another former Gap executive, who will serve as president of Good Commerce Acquisition Company, and Gary Wassner, CEO of fashion-oriented financial services company Hilldun, is vice chairman.
Is this a potential lifeline for struggling retail brands? Well, potentially, but there are complications. The U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, said four people with direct knowledge of the matter.
The SEC is concerned about the depth of due diligence SPACs perform before acquiring assets, and whether huge payouts are fully disclosed to investors, said a third source. Another potential concern is the heightened risk of insider trading between when a SPAC goes public and when it announces its acquisition target, the second source added.