NEW YORK — The Iconix Brand Group inked a deal to buy Joe Boxer on Friday for an undisclosed amount, while those close to the transaction said the brand will stay at Kmart and expand to Sears.
According to bankers who worked on the transaction, the deal is expected to be announced today. At the market close on Friday, shares of Iconix jumped 8.58 percent, hitting a 52-week high, to $8.73, up 69 cents.
Windsong/Allegiance Apparel Group, owned by the Sweedler family of Westport, Conn., purchased Joe Boxer from founder Nick Graham in 2001.
Billy Busko, a director at investment banking firm Financo Inc., which represented Windsong, said the purchase was a stock and cash transaction. Joe Boxer shareholders, namely the Sweedler family, will remain a part of the management team at Boxer and become part of the senior management team at Iconix. Following the transaction, the Sweedler family will become a significant shareholder of Iconix, according to Busko. The banker said founder Nick Graham, who had retained a small stake in the business when he sold it to Windsong, is no longer involved with the company.
Neil Cole, chief executive officer of Iconix, could not be reached for comment. As for Kmart, the exclusive distribution agreement Windsong signed with the discounter continues through the end of 2007.
According to Busko, Windsong “expects that the agreement will be renewed, and will be also expanded to include the Sears stores.”
Even though total sell-throughs of Joe Boxer product have decreased in the last few years, Busko said the decline was due in part to the closure of one-third of Kmart doors. He said, “Joe Boxer still has terrific brand equity at Kmart, which should increase with the Sears merger.”
The Kmart agreement is just for sales in the U.S., and Windsong had kept the right to license Joe Boxer overseas, one that now passes to Iconix.
According to Busko, Joe Boxer helps make Iconix the multidimensional licensing model of the future.
That model was structured in part by UCC Capital Corp., an investment bank headed by Robert D’Loren.
“I think this is just an example of the spectacular innovation that is going on at Iconix at the moment. Iconix really put together the new business model for an industry that is in its intermediation stage. The assets are good, but the way of the business in the industry has changed completely. [Iconix] is the right model for what’s happening in the apparel industry today,” D’Loren said.
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