Iconix Brand Group acquired the 50 percent interest in Iconix Canada that it didn’t already own from its joint venture partner for $19 million.
The company paid $12 million upon closing, and will pay the remaining balance of $7 million over the next two years.
John Haugh, chief executive officer, said that international expansion is a key part of the company’s growth strategy. “Today, Iconix is underpenetrated in Canada and we believe with the strength of our brands we have room for growth,” he said, noting the company’s record of growth in “territories” where it has previously acquired full interest, such as Latin America and China.
Haugh also said the company has decided to retain its 51 percent stake in Buffalo, which it had considered selling.
“Buffalo has been a strong performing brand in both Canada and the U.S.,” the ceo said. “We believe retaining our majority interest in the Buffalo brand and gaining 100 percent control of Iconix Canada solidly positions us for organic growth in Canada.”
Iconix Canada, which was formed in 2013, has the licenses for several Iconix brands. They include London Fog, Ecko Unltd., Danskin, Rampage, Rocawear, Zoo York, Umbro and Ed Hardy.
The company has been evaluating the brands under its umbrella. In May, Iconix inked a deal to sell its interest in Peanuts and Strawberry Shortcake to DHX Media Ltd. for $345 million in cash. In doing so, it decided to move out of the entertainment segment and focus on its core apparel and home brands. The licensed home brands under the Iconix Canada portfolio include Fieldcrest, Royal Velvet and Waverly.
In May, Iconix posted a first-quarter net loss of $4.3 million, or 9 cents a diluted share, which compared with net income of $18.6 million, or 38 cents, a year earlier. Excluding certain items, adjusted net income totaled $1.4 million, or 2 cents a diluted share, for the first quarter. The company said licensing revenue fell 13.2 percent to $58.7 million from $67.7 million.