Iconix Brand Group Inc. and Reliance Brands Ltd. have formed a venture that owns the intellectual property in India of the brands under Iconix’s umbrella.
This story first appeared in the February 22, 2012 issue of WWD. Subscribe Today.
The structure of the joint venture, the first of its kind in India, allows Reliance to seek out licensing and retail opportunities throughout the country for all of Iconix’s fashion and home brands. Because the joint venture itself owns the intellectual property, there are no limitations on what opportunities it can pursue regarding its mandate to grow royalty revenue.
Iconix, a brand management firm, will focus on marketing strategies and ensuring the same global message and positioning for each brand. Reliance Brands is part of Reliance Industries Group, a conglomerate that is the largest private sector company in India. The venture is based in Mumbai.
The latest partnership — Iconix has similar arrangements for Greater China, Europe and Latin America — pushes Iconix closer to its long-term goal of growing international revenue to a third of its total business. In 2010, Iconix posted $98.8 million in income and $332.6 million in revenues. The company reports fourth-quarter and full-year results for 2011 today.
Neil Cole, chairman and chief executive officer of Iconix, said, “We originally thought it would take us three to five years. Now, [we think] we can get there possibly by the end of 2013. We’ve had really good international growth over the last year or two.”
Cole said international revenue eventually will be higher than the current goal of one-third of Iconix’s total business. That’s due in part to the expected growth still to come in emerging markets such as China, India and Brazil, where the consumers are keen on Western brands.
He noted that the agreement with Reliance, as in other joint venture agreements it has in place, contains a provision that includes the intellectual property of brands that Iconix might acquire down the road, provided the option for a given territory is available.
According to Darshan Mehta, ceo of Reliance Brands, “We will hit the ground running. We are ready to go.”
He was referring to the deep connections his firm has in the region regarding sourcing, licensing and retail distribution. The joint venture, which has an initial term for 20 years, allows Reliance the option of also becoming a licensee if it chooses. Discussions between the two parties have been ongoing for some time, and Reliance has already started building the team for the venture’s initiatives.
For now, Reliance will study each brand in the Iconix portfolio to determine who best to work with, and where that distribution channel should be.
“There are a lot of retail doors in India. Every retailer is looking for exclusivity,” Mehta said.
Two of Iconix’s brands — Ed Hardy and Mossimo — already have a presence in India and will be rolled into the new joint venture. Arvind Ltd., which holds the Mossimo license, will continue as licensee.
Other fashion brands in the Iconix portfolio include Candie’s, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Ocean Pacific, Danskin, Rocawear and Starter.