Iconix Brand Group, The Licensing Com. Partner to Expand in Europe
January 4, 2010-- Home Textiles Today,
Iconix Brand Group Inc. and The Licensing Company (TLC) have forged a partnership to further develop and expand the former's portfolio of brands in Europe through a newly formed subsidiary — Iconix Europe LLC.
As part of the transaction, an investment group led by TLC and Albion Equity Partners LLP acquired a 50% interest in Iconix Europe in exchange for $4 million. Additionally, Iconix retained a 50% interest, along with a right entitling it to the first $6 million of distributions. Distributions more than $6 million will be split evenly in half between the parties involved.
Iconix Europe's business model will resemble that of Iconix's strategy of signing traditional and direct-to-retail licensing agreements for the Iconix portfolio of brands. There are 11 existing licensing agreements in the region.
"We are excited to be partnering with TLC, who [is] recognized as licensing experts in the European marketplace," said Neil Cole, chairman and ceo, Iconix. "With early signs of success in our recently formed international partnerships in China and Latin America, we have found that having local expertise with local resources around the world is instrumental to the success of rolling out our brands globally. International expansion remains an important initiative for our organic growth, and we look forward to working with TLC to grow our brands through this new venture."
Added Melvin Thomas, ceo and co- founder of TLC: "This is an important relationship for both TLC and the European Retail market place. We are excited to be partnering with Iconix who have clearly helped re-define the licensing and brand extension business globally. TLC is uniquely qualified and respected throughout Europe and we will be looking to translate the Iconix model and brand assets into real industry success through our local offices in London, Munich and Paris."
Iconix Europe marks the third international partnership for Iconix. The others are with Silas Chou's Novel Fashions in China and with The Falic Group in Latin America. Including the forthcoming office of Iconix Europe, Iconix has locally-based personnel in New York, Hong Kong, Panama City and London.
More news came in an updated guidance. Iconix reported that it expects to record a pre-tax gain of approximately $5 to $7 million related to this transaction. Inclusive of this transaction and the Ecko acquisition, the company now anticipates 2009 revenue to be $227 to $231 million from its previous estimate of $215 to $220 million. As previously disclosed, the Ecko acquisition will not be accretive in 2009. Therefore, due to deal costs related to the Ecko acquisition in addition to slightly higher marketing expense, Iconix expects to be at the higher end of its 2009 EPS guidance range of $1.17 to $1.22.
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