Brand management company Iconix Brand Group is to review a wider range of strategic alternatives, including a potential sale or merger of the business.
In a Securities and Exchange Commission (SEC) filing yesterday (13 July), Iconix said its board of directors has authorised management and its external advisors to consider a broader range of options to enhance shareholder value.
Other possibilities include dispositions of discrete brands and related assets or a recapitalisation of its existing capital structure. It is also mulling financings or re-financings of its existing indebtedness, sales of equity and equity-linked securities, or licensing.
This is in addition to the company’s previously announced agreements to sell the rights to the Umbro and Starter brands in China.
“We are confident in the company’s strategy to continue to de-lever its balance sheet and rationalise our cost structure,” said CEO Bob Galvin. “While we have undertaken a number of actions toward positioning the company to drive growth and preserve operating leverage to achieve sustainable market leadership in the brand management sector, including recent asset sales, after careful consideration, our board has determined that it is prudent at this time to undertake a broader strategic review in order to ensure that all available alternatives for the company are being evaluated to maximise value for our shareholders.
“As the board conducts its review, we remain focused on executing on our strategy and continuing day to day operations as usual.”
Iconix specialises in marketing, merchandising and licensing its brand portfolio, which includes Ed Hardy, Lee Cooper and Pony.
The firm has retained Ducera Partners LLC as a financial advisor, together with Dechert LLP, its existing legal counsel, in connection with the strategic review.
In its most recent quarterly results, Iconix reported a 22% decline in total revenue to US$28m for the first quarter ended 31 March. GAAP net income attributable to Iconix for the period reflected a loss of $21.5m, compared to income of $17.9m a year ago.