Iconix considers possible sale
As Iconix Brand Group, Inc. continues its search for a financial lifeline, the New York-based brand management company has announced that it is examining a range of strategic alternatives, including a potential sale or merger.
In a release published on Monday, the company, whose owned brand portfolio includes Umbro, Lee Cooper and Ecko Unltd, announced that its management has received authorization from the board to explore options ranging from a possible sale or merger to debt and equity financings.
As it expands its strategic review process, the company will continue to work with financial adviser Ducera Partners, as well as its legal counsel, Dechert.
The news comes after Iconix’s announcements that it is selling its Umbro and Starter businesses in China for $62.5 million and $16.0 million, respectively. According to the company, it intends to use the funds raised by these transactions for debt repayment and covering general corporate expenses. Both sales are expected to close by September 15.
As explained by Iconix CEO Bob Galvin when the company reported its first-quarter financial results in May, “the Covid-19 pandemic has had a meaningful near-term impact on [Iconix’s] business and that of [its] licensees.”
In the first quarter ended March 31, the company’s total quarterly revenue decreased 22% to $28.0 million, while its net loss totaled $21.5 million, or $1.86 per diluted share.
As part of its strategic response to the negative impact of the coronavirus pandemic, Iconix has already reduced its headcount and eliminated non-essential operating expenses, measures which the company says will lead to more than $10.0 million in annualized cost savings.
The Covid-19 pandemic has had a devastating impact on the fashion sector thus far, with Monday also seeing New York & Co parent company RTW Retailwinds join a growing list of retailers filing for bankruptcy since the start of the crisis, a list that already includes J.C. Penney, Brooks Brothers, J.Crew and Neiman Marcus.
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