Iconix Brands Group Inc. was able to pull $62.5 million in cash out of its branded cupboard with an agreement to sell its equity in Umbro China to HK Qiaodan Investment. 

“The Umbro China Sale includes the sale of the Umbro sports brand in the People’s Republic of China, Hong Kong, Taiwan and Macau,” Iconix said in a filing with the Securities and Exchange Commission.

The sale of the business, controlled by Iconix’s arm in Luxembourg, is expected to closed by Sept. 15. 

Iconix plans to use the proceeds to pay down its debt and for general corporate purposes.

The Umbro China business has been in transition for some time. 

“I think China is continuing to be an important market for us,” said Iconix chief executive officer Robert Galvin in November. “We think that we have had the wrong partner for Umbro. We’ve terminated that, and we’re assessing other options in order to expand that.”

The brand management firm’s international revenues fell 5 percent to $17.7 million in the fourth quarter as Umbro China weighed on results. 

Iconix’s Umbro brand.

Iconix counts Umbro among its portfolio brands.  Courtesy Photo

The deal is proof that even with the COVID-19 crisis bearing down on the global economy, companies are still on the hunt for brands. 

China, which was first to battle the coronavirus, has been bouncing back, although there are still worries of a second wave of infections. 

Iconix investors applauded the deal and sent shares of the firm up 20.5 percent to 92 cents in trading on Wall Street. 

But even with that gain, Iconix still has a market capitalization of just $10.9 million and is carrying more than $650 million in total debt.

Iconix owns, license and markets a portfolio of brands that stretches from Joe Boxer to London Fog and also has interests in Material Girl, Ed Hardy, Buffalo and more.

The company has come under fire from the SEC in the past and in December agreed to pay $5.5 million to settle an official complaint alleged the company manipulated revenues and hid losses.

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