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Iconix Said in Talks to Buy Lee Cooper

The European denim brand is being sold by private equity firm Sun European Partners, an affiliate of Sun Capital Partners in the U.S.

Images from the Lee Cooper Web site.

Iconix Brand Group is said to be in discussions to acquire Lee Cooper.

This story first appeared in the February 19, 2013 issue of WWD.  Subscribe Today.

The European denim brand is being sold by private equity firm Sun European Partners, an affiliate of Sun Capital Partners in the U.S. The sale process is in an advanced stage, according to an investment source. Another financial contact said a deal could be completed in the next few weeks.

Sun Capital acquired the label in 2005 from Matalan PLC. Emerisque Brands and The 180 Group at the time were coinvestors, but have since exited their positions. Lee Cooper, based in Luxembourg, no longer manufactures any products. Sun European owns the license to the brand.

Representatives at Sun European declined comment, as did executives at Iconix.

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If discussions don’t pan out between Iconix and Sun European, the latter might have a backup suitor in Authentic Brands Group, which is said to have taken a look at Lee Cooper. Both Iconix and Authentic Brands are brand-management firms. They acquire the intellectual property assets of brands and then license out the name, but don’t own any of the operating or manufacturing elements typical of most brand operators.

Executives at Authentic Brands declined comment.

Authentic Brands and Iconix have eyed the same IP assets before, most recently was last fall when men’s wear firm HMX Group showed signs of financial distress prior to filing for bankruptcy in October 2012. Authentic Brands won that round, first as the stalking horse bidder in the bankruptcy court-approved auction, and then as the ultimate winner of the auction.

In the case of Lee Cooper, market sources said the two have made preliminary offers for the name known as Europe’s oldest denim brand. Iconix is said to be the more aggressive of the two firms in the pursuit for Lee Cooper.

What isn’t quite clear is how much Lee Cooper might be worth in terms of valuation. Sources believe that a fair valuation is in the $50 million to $60 million range.

Founded in 1908 as workwear apparel firm M Cooper Overalls, the brand in the past aligned itself with major music groups, such as The Rolling Stones and The Kinks in the Sixties. As a result, the line has evolved into a British rock ’n’ roll-inspired collection.

Two-thirds of its sales in Europe are in jeans, according to a financial source. In the Middle East, more than 60 percent of its sales are in T-shirts. Among denim brands, Lee Cooper is believed to be the largest-selling jeans brand by volume in the Middle East. One financial source said that the bulk of its business is currently in that territory, although the brand is sold in more than 88 countries.

Last fall, Lee Cooper opened its first freestanding store in Japan, in Tokyo, operated by its Japanese licensing partner. Mac House, Lee Cooper’s retail partner in Japan also distributes the line in over 350 stores.

Lee Cooper as a brand is believed to have a volume of about $400 million in retail sales, with much of that from the Middle Eastern countries. That’s a drop from the $600 million in estimated sales volume in 2008 when the brand celebrated its 100th birthday.

One problem with the brand, given its extensive licensing structure already in place, is whether there’s any more room for growth. One source noted that, as an example, the brand might be hard to bring successfully to the U.S.