WWD.com/beauty-industry-news/financial/iconix-said-buying-rampage-561998/
government-trade
government-trade

Iconix Said Buying Rampage

The Iconix Brand Fashion Group is going on a rampage in more ways than one.

NEW YORK — The Iconix Brand Fashion Group is going on a rampage in more ways than one.

The company formerly known as Candie’s Inc. plans to reveal today that it has acquired Rampage, a contemporary sportswear label, for $45.9 million — $25.8 million in cash and $20.1 million in company stock. The deal marks Iconix’s third acquisition in the past 12 months and ratchets up its label count to five.

During an interview Friday at the Rampage showroom here, Neil Cole, chairman and chief executive officer of Iconix, said the acquisition makes it a nearly $1.5 billion operation. The purchase also gives the powerhouse strong standing in upper-tier department stores, a distribution channel that it does not have with its other brands — Candie’s, Bongo, Joe Boxer and Badgley Mischka. Candie’s and Joe Boxer are sold exclusively at Kohl’s and Kmart, respectively, while Bongo sells at department stores and Badgley Mischka sells to better specialty stores.

“Rampage has great potential,” Cole said. “It has been around for more than 20 years. Americans know the brand. It has distribution in a segment of the marketplace that we have vacated.”

As part of the Rampage deal, Iconix is now licensing the brand’s core sportswear business, which is aimed at women between the ages of 16 and 25. Rampage has 12 licensees, including one with Charlotte Russe, which operates 70 mall-based Rampage stores. The company is expected to generate between $9 million and $11 million in licensing royalties in 2006. The Rampage collection is sold in about 2,000 stores, said Larry Hansel, founder and ceo of Rampage.

Under the Iconix umbrella, he said he will be freed up “to focus on the product and not have to worry about anything else. But I am also here to assist Neil Cole in any way I can to grow the business.”

Cole pointed to footwear, intimates and swimwear as a few of Rampage’s stronger licenses, and said he hopes to sign licensing deals for dresses and denim in time for a fall 2006 launch.

Another area of opportunity for Rampage is international distribution, with China being at the top of the list, Cole said. Rampage is currently sold in 12 countries.

This story first appeared in the September 19, 2005 issue of WWD.  Subscribe Today.

As has been the case with its other acquisitions, Iconix plans to maximize marketing with Rampage. “We will spend a lot more money on marketing. This deal has brought a tremendous amount of liquidity to the company and it will allow us to take the company to the next level.” Hansel said.

Rampage, a 22-year-old label, has had its share of ups and downs over the years. In 1996, its wholesale volume hit $195 million, but the following year, overexpansion and reportedly weak financial management put the brand into bankruptcy. The company emerged from bankruptcy in 1999. As part of Iconix, the company will continue to be based at 530 Seventh Avenue and the company’s 135 employees are not expected to be affected by the takeover. The young contemporary sportswear will continue to encapsulate streetwear, clubwear and careerwear, since that is “where the market is going. It is not as casual as it has been,” Hansel said.

The acquisition was financed by upping Iconix’s existing asset-backed note, which is secured by its intellectual property and is due at the end of 2012. UCC Capital Corp. handled the transaction. Robert D’Loren, president and ceo of UCC Capital Corp., said “We look at a lot of opportunities. This new business model gives us the ability to continue to grow organically with our five existing brands and then with acquisitions,” Cole said. “We’re not necessarily looking at [specific] sectors. We like strong consumer brands that fit our portfolio.”