Sequential Brands Group Inc. said Monday its board of directors is conducting a broad review of strategic alternatives focused on maximizing shareholder value. That could include the divestiture of one or more existing brands, the acquisition of one or more new brands, a stock buyback program, and other initiatives.
The board has hired Stifel to serve as its exclusive financial adviser to help in the process.
In addition, the company said Karen Murray has stepped down as director and chief executive officer of Sequential. She will continue to be a senior adviser and assist the company on strategic opportunities. The board has begun a search for a new ceo. Chad Wagenheim, executive vice president of strategic development and operations, has been named president and will assist the company during this transition period.
Murray became ceo of Sequential in March 2017, having previously been president of VF Sportswear, where she oversaw the $1.2 billion global brand Nautica, as well as Kipling.
Sequential’s brands include Joe’s, Ellen Tracy, Jessica Simpson, And1, Gaiam, William Rast, Heelys, Caribbean Joe and Avia. Last June, Sequential completed the sale of Martha Stewart Living Omnimedia for $166 million in cash consideration at closing to Marquee Brands LLC.
Regarding the review of strategic alternatives, William Sweedler, chairman of Sequential, said, “After having received unsolicited interest for several of our brands from multiple parties, Sequential’s board of directors is engaging in this formal process to ensure that we are evaluating all alternatives to best further the interest of our shareholders.”
The company hasn’t set a timetable for the conclusion of the review and doesn’t plan to comment further or update the market with any additional information on this matter unless and until the board has approved a specific transaction or otherwise deems disclosure necessary or appropriate. It also said there is no certainty that the review of strategic alternatives will result in the company pursuing a particular transaction or completing any such transaction.
As far as the management change, Sweedler said, “I’d like to thank Karen Murray for her leadership and the contributions she has made during her tenure with the company as ceo.”
He noted, “Chad [Wagenheim, executive vice president of development and operations] has been and continues to be an integral part of our executive team. With his demonstrated operating expertise, strategic leadership and focus on results, we’re confident in his ability to help lead Sequential through this next phase.”
Reached on Monday, Murray said, “I’ve enjoyed my time at Sequential and the opportunity to be exposed to a different part of the business. I’m looking forward to working with them as a senior advisor as I prepare for my next chapter.”
For the second quarter ended June 30, total revenue from continuing operations was $26.4 million, compared to $33.1 million in the prior year quarter. On a GAAP basis, net loss from continuing operations was $3.3 million, compared to net income from continuing operations for the second quarter 2018 of $2.2 million.