Iconix seeks lead retail partner for Cannon
October 31, 2007-- Home Textiles Today,
New York – Seeking to bolster major-retailer support for its recently acquired Pillowtex properties, Iconix Brand Group today said it would like to land an “anchor” for the Cannon brand.
Speaking to analysts on the Iconix third-quarter earnings call, chairman and ceo Neil Cole said the company is “working to broaden distribution” for Cannon and to potentially add “a large retail partner as an anchor, possibly even as an exclusive.”
Cannon is currently carried at Anna’s Linens and Meijer, among others.
Both Cannon and Royal Velvet are licensed to Li & Fung for bedding, bath towels and other home goods, with a range of licensees in other textiles categories. Cole noted that these brands generate about two-thirds of the Pillowtex licensing revenue. He indicated that the analysis of Cannon retail distribution is being done in concert with Li & Fung.
Cole also noted that a major Royal Velvet program will launch next spring at “one of the leading home specialty retailers,” and that Iconix is working with that retailer on an “exciting marketing campaign.” While that retailer was not named today, Iconix recently did state publicly that the program was being prepared for Bed Bath & Beyond.
Of the other two main Pillowtex brands, Cole characterized the Fieldcrest direct-to-retail license with Target as “performing well,” and said Iconix is exploring the expanded potential for Charisma, which has product manufacturer licensees and is currently positioned in such venues as Bloomingdale’s.
In response to an analyst’s question on marketing, Cole said Iconix is considering the recruitment and use of one or more brand spokespersons for the Pillowtex brands. “We definitely plan on putting celebrities in the bed,” Cole quipped, saying that one intention of brand marketing of these home brands would be to “make it interesting, exciting, shake it up a little.”
Iconix, nearing the end of its third year in business, has grown rapidly in the apparel brand licensing arena; the Pillowtex acquisition represents its entry into the home categories. The company said it is assembling a team of executives to drive the home businesses.
Through a series of acquisitions and major licensing deals, Iconix has roughly doubled its revenues and earnings over the past 12 months.
For the third quarter ended Sept. 30 the company reported licensing revenue of $42.7 million, up 93.2% from $22.1 million for the same period one year ago. Net income of approximately $17 million was up 114% from about $7.9 million last year.
Iconix reiterated a full-year 2007 projection of $150 - $160 million in revenues and diluted earnings per share of $0.96 - $1. For 2008, company guidance was revenues of $240 - $250 million and diluted EPS of $1.35 - $1.40. The four Pillowtex brands are projected to deliver $35 - $37 million in 2008 licensing revenue.
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