Iconix Brand Group, Inc. (Nasdaq: ICON) ("Iconix" or the "Company"), today announced that it has acquired the remaining 50% of Iconix China from its joint venture partner Novel Fashion Brands Limited, owned by the Chou family, for $56.4 million, of which $40.4 million was paid in cash and $16 million was paid in the Company's common stock.
"We view China as a major growth opportunity. Through Silas and Veronica Chou's expertise and relationships, Iconix China has successfully launched nine of our brands with more than 900 standalone stores, shop-in-shops and counters throughout China," stated Neil Cole, Chairman and CEO of Iconix. "Now that our business has gained sufficient scale, we have decided to acquire management and control of the business, consistent with the next phase of our international growth strategy."
Iconix China was formed in September 2008. The operating model, different from Iconix' traditional licensing model has been to attract entrepreneurs and fast-growing local Chinese companies, providing them with an Iconix brand in which they invest through the build-out of stand-alone stores and shop-in-shops, and in return Iconix China receives an equity stake in the newly formed venture.
To date, the brands that Iconix China has placed successfully are Candie's and Marc Ecko Cut & Sew with Shanghai La Chapelle Fashion Co. Ltd (HK 6116); London Fog with China Outfitters (HK1146); Material Girl with Ningbo Peacebird; Ed Hardy with Landmark International; Ecko Unltd. with Xi Ha Clothing; Badgley Mischka with Eve NY; Joe Boxer with Northeast Socks; and Royal Velvet with Qingdao Hongfang.
The largest brand in the Iconix China joint venture is Candie's, which partnered with Shanghai La Chapelle in 2010. The Candie's business in China expanded to more than 700 stores and shop-in-shops by 2014 and is poised for continued growth. The Company's business platform in China also includes its three global brands of Peanuts, Umbro and Lee Cooper which have been managed outside of the joint venture. China has been one of the fastest growing territories for the Peanuts brand. Today, Peanuts has over 2,000 points of distribution across China including 20 Charlie Brown Cafe's, and significant growth potential with the highly anticipated launch of the Peanuts movie. In 2014, the Company partnered with Global Brands Group to build out the Lee Cooper and Umbro brands in China, both of which have strong brand recognition in the region.
Willy Burkhardt, EVP, Managing Director International, commented, "This transaction will bring us closer to the important Chinese market, help us to identify potential brand acquisitions and develop new business opportunities for our unplaced brands."
This transaction provides Iconix with full control and ownership of Iconix China, which owns equity stakes in two joint ventures with the recently public Shanghai La Chapelle that can be put to Shanghai La Chapelle for cash; publicly traded shares in China Outfitters; equity stakes in an additional six retail ventures of which four have plans to go public in the next 5 years; control over a portfolio of 15 unplaced brands; and an office and staff in Hong Kong dedicated to Iconix China.
About Iconix Brand Group, Inc.
Iconix Brand Group, Inc. owns, licenses and markets a growing portfolio of consumer brands including: CANDIE'S (R), BONGO (R), BADGLEY MISCHKA (R), JOE BOXER (R), RAMPAGE (R), MUDD (R), MOSSIMO (R), LONDON FOG (R), OCEAN PACIFIC (R), DANSKIN (R), ROCAWEAR (R), CANNON (R), ROYAL VELVET (R), FIELDCREST (R), CHARISMA (R), STARTER (R), WAVERLY (R), ZOO YORK (R), SHARPER IMAGE (R), UMBRO (R), LEE COOPER (R), ECKO UNLTD. (R), MARC ECKO (R) and STRAWBERRY SHORTCAKE (R). In addition, Iconix owns interests in the ARTFUL DODGER (R), MATERIAL GIRL (R), PEANUTS (R), ED HARDY (R), TRUTH OR DARE (R), BILLIONAIRE BOYS CLUB (R), ICE CREAM (R), MODERN AMUSEMENT (R), BUFFALO (R), NICK GRAHAM (R) and PONY (R) brands. The Company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the U.S. and worldwide. Through its in-house business development, merchandising, advertising and public relations departments, Iconix manages its brands to drive greater consumer awareness and equity.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.
The statements that are not historical facts contained in this press release are "forward-looking statements" within the meaning of U.S. federal securities laws that involve a number of known and unknown risks, uncertainties and other factors, all of which are difficult or impossible to predict and many of which are beyond the control of the Company, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, uncertainty regarding the results of the Company's acquisition of additional licenses, continued market acceptance of current products and the ability to successfully develop and market new products particularly in light of rapidly changing fashion trends, the impact of supply and manufacturing constraints or difficulties relating to the Company's licensees' dependence on foreign manufacturers and suppliers, uncertainties relating to customer plans and commitments, the ability of licensees to successfully market and sell branded products, competition, uncertainties relating to economic conditions in the markets in which the Company operates, the ability to hire and retain key personnel, the ability to obtain capital if required, the risks of litigation and regulatory proceedings, the risks of uncertainty of trademark protection, the uncertainty of marketing and licensing acquired trademarks and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "believe", "anticipate," "expect", "confident", "will", "project", "provide" "guidance" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that may arise after the date of such statements.
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SOURCE Iconix Brand Group, Inc. through PRNewswire by press release ©