Bluestar Alliance to acquire gift retailer Brookstone. Credit: John Phelan.

US-based brand development firm Bluestar Alliance has placed a $40m bid to buy bankrupt gift retailer Brookstone.

The firm filed the papers with the US bankruptcy court in Delaware. Its bid challenges the $35m offer placed by Authentic Brands Group (ABG) earlier this week, reported Reuters.

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ABG, through its proposal, has expressed interest in identifying a partner to maintain and maximise Brookstone’s retail business.

In June, Authentic Brands acquired Nine West shoe for $350m as well as an accessories label.

Brookstone intends to shut down 101 stores in malls. It expects to continue operating its 34 shops in airports.

Retuers reported, citing court papers that Authentic Brands and Bluestar have proposed to work with a different purchaser for the retailer’s real estate. They also intend to explore the feasibility of keeping some offline outlets open.

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“We are focused on continuing to serve our loyal customers through our airport, e-commerce and wholesale businesses.”

Brookstone CEO Piau Phang Foo said: “For now, we are focused on continuing to serve our loyal customers through our airport, e-commerce and wholesale businesses. Brookstone is a beloved, valuable brand, and we are confident that this process will maximize value for all of our stakeholders.”

However, ABG’s offer would serve as a baseline at a competitive auction for Brookstone’s intellectual property and other assets scheduled to take place on 24 September.

According to the retailer, it is currently receiving serious bids from a number of potential buyers.

Brookstone filed for Chapter 11 bankruptcy for the second time on 2 August.

Wells Fargo and Gordon Brothers offered $30m in post-petition financing to the retail company to support operations during the sale and restructuring process.