Iconix profits up, launches China venture
May 1, 2008-- Home Textiles Today,
New York – Brand management firm Iconix Brand Group recorded first-quarter net profit of $18.2 million, up 43.3% from $12.7 million in the same period one year ago – and launched a joint venture in China to invest in fast-growth manufacturers and retailers there.
Revenues in the quarter ended March 31 were up 81% to $55.7 million.
The joint venture in China, announced today, is a partnership with Hong Kong-based Novel Fashion Holdings Limited, controlled by Silas Chou, known in the fashion world for his ownership roles at Tommy Hilfiger and Michael Kors.
Iconix China will be jump-started with a $20 million investment by Novel and $5 million by Iconix.
The new company will not be tied to the licensing model, as is the case in the U.S. business – instead, transactions will be based on Iconix selling brand rights in exchange for equity in Chinese companies.
The goal, said Iconix chairman and ceo Neil Cole, is “to obtain equity in strong Chinese companies that have the ability to go public in a short time.” Iconix China, he noted, “will not be an operator,” but will “focus entirely on marketing and brand management.”
Next stop: India. Cole said Iconix is in talks with three candidate firms there for some type of joint venture.
Iconix, which is chiefly involved in apparel, also owns the former Pillowtex brands Cannon, Charisma, Fieldcrest and Royal Velvet – each of which is in an exclusive or near-exclusive with a particular retailer.
David Conn, evp, said the current debut of Royal Velvet in Bed Bath & Beyond will be supported by advertising featuring a “major Hollywood celebrity” to be revealed next week.
Of the other home brands, Conn said Fieldcrest Luxury is in a successful “reposition” across soft home in Target; Cannon is slated for a “faster” soft launch this fall at Sears and Kmart; and a Charisma Couture line is being developed with Bloomingdale’s, which already carries Charisma.
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