Iconix Brand Group Inc.’s acquisition of a controlling stake in Buffalo David Bitton is expected to greatly accelerate the jeanswear brand’s expansion beyond North America.
It just might speed the development of the rest of the Iconix portfolio in Buffalo’s homeland of Canada, too, Neil Cole, chief executive officer of Iconix, told WWD.
New York-based Iconix said Monday it paid $76.5 million in cash to Montreal-based Buffalo International ULC for a 51 percent stake in the Buffalo David Bitton brand, which will now be housed in a venture formed by the two companies to accommodate the acquisition.
The Canadian firm becomes the “core licensee” for the brand it started in 1985, and royalties from Buffalo and other licensees will flow into the joint venture. Although the number of licensees is expected to expand in the new relationship with Iconix, they currently cover only the U.S. and Canada and consist of The Levy Group for outerwear, Swank Inc. for accessories and Colors in Optics Ltd. for eyewear.
Asked if he was looking to fill a gap in the Iconix portfolio with an upscale denim label, Cole brushed aside conversation about categories and classifications.
“We don’t focus on ‘white spaces,’” he said in an interview with WWD. “We look for great iconic trademarks that we can take around the world and to which we can add value. With our relationships in China, India, South America and elsewhere, we see tremendous upside to the brand.”
Gabriel Bitton, ceo of Buffalo International, said he looked forward to “Iconix’s strong and proven global platform” helping “to grow Buffalo to the next level.”
While ample opportunities remain in North America, growth will most certainly focus on the international arena, which Buffalo has explored only through limited wholesaling activities and which could be well supported by enhancements Iconix has made to its global footprint in recent years. The brand management firm formed Iconix China as a joint venture with Silas Chou’s Novel Fashion Brands Ltd. in 2008, followed by a JV in Latin America with the Falic Group in 2009 and, last February, a similar entity in India with Reliance Brands Ltd.
“Buffalo is a lifestyle brand that hasn’t done a lot of licensing, so there are a lot of great opportunities in a lot of categories, starting in North America,” Cole said. “U.S. expansion is an important part of where we could go, but the expansion possibilities apply pretty much around the world, including the joint ventures that are already a part of our platform.
“We’ve been talking to Gabriel and his team,” he continued, “and we’re discussing ways they could help us with our portfolio in Canada as well. They have a tremendous organization in place in their home market.”
Numerous Iconix brands have a direct-to-retail licensing model — Mudd and Candie’s are exclusive to Kohl’s, Op to Wal-Mart and Madonna’s Material Girl brand exclusive to Macy’s — but Buffalo, like the Ed Hardy and Rampage brands, will continue to pursue multiple wholesale accounts. Macy’s, Dillard’s and Lord & Taylor are among the largest customers of a business that last year generated about $125 million in revenues, according to market estimates, through wholesale activities, 29 stores in Canada and one in the U.S., a 4,000-square-foot unit that opened in New York’s SoHo district last year. The company also conducts e-commerce at buffalojeans.com.
Buffalo has a secondary brand, I Jeans by Buffalo, which is sold exclusively at J.C. Penney stores and isn’t included in the transaction.
Iconix expects the brand to generate about $25 million in annual royalty revenue and yield between 75 and 80 percent of that figure in earnings before interest, taxes, depreciation and amortization.
Based on the acquisition and a lower number of common shares outstanding because of share repurchases, Iconix raised its full-year earnings guidance to a range of $1.90 to $2 from its previous range of $1.75 to $1.85. The new guidance implies fourth-quarter earnings of 75 to 85 cents a diluted share.
Shares of Iconix closed Monday at $23.95, down 24 cents, or 1 percent.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)