Iconix to sell Lee Cooper China
American brand management company Iconix Brand Group, Inc. has announced that Red Diamond Holdings, its wholly-owned Luxembourg-based subsidiary, is selling the Lee Cooper business in China for $16.0 million.
Red Diamond has entered into a share purchase agreement which will see the holding company part with all of the equity interests of Lee Cooper China. The sale includes the Lee Cooper brand in mainland China, as well as in Hong Kong, Taiwan and Macau.
The transaction, which is subject to the satisfaction or waiver of customary closing conditions, is expected to complete by the end of March 2021. Iconix did not reveal the identity of the brand’s purchaser.
The company intends to use the proceeds from the sale of Lee Cooper China to repay amounts due under its existing financial arrangements, as well as for general corporate purposes.
Iconix, which, aside from Lee Cooper, also owns brands such as Umbro and Ecko Unltd, has offloaded a number of its Chinese operations over the past few months as it seeks to get its finances back on track. Like many of its industry peers, the company has suffered from the economic impact of the Covid-19 pandemic.
In November, the New York-based company completed the sale of Starter China for $16.0 million, having already sold Umbro China to HK Qiaodan for $62.5 million earlier in the year.
In the third quarter ended September 30, 2020, Iconix reported a 31% year-over-year decline in its revenues, which totaled $24.5 million.
However, the company was able to swing back to a quarterly profit of $45.7 million, or $1.51 per share, largely thanks to cost-reduction efforts, which saw the group achieve a 62% decrease in selling, general and administrative expenses compared to the prior-year period.
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