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Ecko Sells Avirex to Kids Headquarters

To raise cash and streamline organization, Marc Ecko Enterprises has sold the Avirex young men’s brand to Kids Headquarters.

In its ongoing efforts to raise cash and streamline its organization, Marc Ecko Enterprises has sold the Avirex young men’s brand to Kids Headquarters. Terms of the deal were not disclosed.

This story first appeared in the June 12, 2009 issue of WWD.  Subscribe Today.

Avirex is a $50 million wholesale business, with major accounts including J.C. Penney, Stage Stores, Hibbett Sport, Modell’s, Dr. Jay’s and Eastbay. Avirex president Jeff Strumeier will remain with the company and continue to oversee the business at Kids Headquarters, with plans to bring about 20 employees with him.

Kids Headquarters is the longtime children’s licensee of the Ecko Unlimited brand and is a former licensee of the children’s Avirex brand. This will be the first time the New York-based children’s wear specialist operates its own branded men’s business.

“We’ve known the Ecko organization for a long time, and when we heard they were looking to sell the Avirex brand, we thought it would be a good fit for us,” said Cory Silverstein, executive vice president of Kids Headquarters. “We’re going to leave the front end of the business intact, but think we can leverage a lot of our back-office efficiencies. And we think there are additional licensing opportunities in new categories, especially footwear and outerwear.”

Kids Headquarters operates 23 licensed children’s wear brands and characters, including Calvin Klein, Rocawear, Kenneth Cole, Hurley, Timberland, Disney, Nickelodeon and Marvel Comics. It is also a 50-50 partner in singer Beyoncé Knowles’ House of Deréon brand, overseeing all the licenses associated with it.

The Avirex sale comes on the heels of Marc Ecko selling its watch trademarks to Timex Group earlier this month. Ecko is restructuring in order to reduce a large debt load owed to a group of lenders headed by CIT, as well as trade receivables owed to its sourcing agent, Li & Fung Ltd.

“We are focused on reducing the leverage on the company and are committed to focusing on the core Ecko Unlimited brand,” said

Seth Gerszberg, chief executive officer of Mark Ecko Enterprises.

Marc Ecko acquired the Avirex trademarks in 2006 from company founders Jeff and Jacky Clyman, who operated Avirex for three decades as an aviation-inspired outerwear brand.

In another cost-cutting move, earlier this month the company shuttered a Marc Ecko Cut & Sew store in Manhattan’s Chelsea neighborhood, which Gerszberg said was not turning a profit. The company still operates nine Marc Ecko Cut & Sew units and 73 Ecko Unlimited mall-based stores. Gerszberg said those stores are performing well, with a 14 percent comps improvement year-to-date. Additionally, Ecko will introduce its first men’s fragrance this fall, from licensee Parlux.

The fate of Ecko’s Zoo York and Complex magazine businesses remains up in the air, with the company continuing to work on potential deals. As divisions are sold or spun off, Marc Ecko will reduce its footprint in its current massive headquarters on 23rd Street in Manhattan, which takes up 200,000 square feet over four floors. “We are talking to our landlords about returning space to them,” noted Gerszberg.