Iconix Brand Group Q1 2017 sales decline, debt payment plan in place
Iconix Brand Group reported Q1 2017 revenue down 11% to $58.7 million. Q1 also saw the strategic sale of its entertainment segment for $345 million in cash, which will provide the bulk of cash used to reduce company debt by $362 million.
John Haugh, CEO of Iconix commented, "Over the past year, we have been focused on two key priorities- improving the balance sheet and driving organic growth... Further, we believe we can generate the most value and growth for our Company with a portfolio that is focused on businesses where we believe we have a leadership position- fashion, active and home."
The Peanuts and Strawberry Shortcake brands of Iconix' entertainment segment will be sold to DHX Media to fulfill the first corporate goal of paying down debt. Proceeds of the sale will be used along with extra cash on hand to pay down Iconix' $362 million of debt. The deal is expected to close by the end of Q2.
The company reports that the loss of sales from the entertainment segment will be offset by savings on interest payments on Iconix' existing debt. The sale will enable the company to fully extinguish an outstanding $260 million loan.
With respect to the second corporate goal of organic growth, Iconix' fashion brands have been hustling to stay competitive and relevant. The company lost licensing revenue from the Badgley Mischka brand which it sold in 2016. Previously that label generated $0.2 million licensing revenue alone.
Iconix sold the Badgley Mischka trademark rights for $11 million. Current fashion brands in the Iconix portfolio include Joe Boxer, Rampage, Material Girl, Rocawear and Ed Hardy.
Haugh continued, "as it pertains to organic growth, there have been some challenges, but we are working on initiatives that should drive improved revenue performance in the back half of the year."
In action sports, one such organic growth project includes Iconix lifestyle brand Ocean Pacific (OP) being selected to play a part in Urban Outfitters' exclusive Icons of Culture curated collection. Vintage OP styles and graphics will be revitalized and reintroduced to the market. The initiative is designed to bring heritage brands to a new generation of consumers this summer.
Copyright © 2022 FashionNetwork.com All rights reserved.