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Iconix Brand Group Acquires Lee Cooper

The company, which beat Wall Street’s expectations for the fourth quarter by 3 cents, is on the prowl for more deals.

NEW YORK — Iconix Brand Group, which acquired the Lee Cooper denim brand, beat Wall Street’s expectations for the fourth quarter by 3 cents, even though net income fell by 3.9 percent.

Iconix acquired Lee Cooper for $72 million in cash, buying the denim brand from Sun Capital Partners affiliate Sun European Partners. The Lee Cooper brand, which is expected to generate $14 million in royalty income for 2013, has annual global retail sales of $500 million, Iconix said.

The acquisition comes nearly three weeks after Iconix picked up a 51 percent controlling stake in Montreal-based denim brand Buffalo David Bitton for $76.5 million. In October, the firm acquired Umbro for $225 million from Nike Inc.

 

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Neil Cole, chairman and chief executive officer, said in a telephone interview that even though Iconix has done three deals in a couple of months, the company is on the prowl for more acquisitions, with many deals focused on international growth opportunities.

“The emerging markets are where the growth is: China, Brazil and India. We have great partners around the world where we can [build] our strong iconic brands into the network that we’ve built around the world,” Cole said.

He said the international businesses currently comprise about one-third of Iconix’s portfolio.

Another area where it is looking to expand is the entertainment sector. The company in October signed a deal for a Peanuts animated feature film in 2015. According to Cole, Iconix is also working on more agreements for brands similar to Peanuts where entertainment deals are an avenue for growth. Iconix acquired an 80 percent stake in the Peanuts brand in 2010 for $175 million.

 

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For the three months ended Dec. 31, net income was $26.1 million, or 37 cents a diluted share, from $27.2 million, or 36 cents, last year. Excluding one-time items, adjusted profit was 41 cents a share, which beat analysts’ consensus estimate of 38 cents for the quarter. Licensing and other revenue fell by 10.9 percent to $85.1 million from $95.5 million, hurt in part by declines in its men’s businesses.

For the year, net income fell 13.2 percent to $109.4 million on a revenue decline of 4.3 percent to $353.8 million.

The company raised 2013 diluted earnings per share guidance to $1.95 to $2.05 from $1.90 to $2, and its revenue guidance to between $425 million to $435 million from $415 million to $425 million, reflecting its Lee Cooper acquisition.