Iconix Now Holds 100% Stake in JV - Analyst Blog
05 March 2014 - 11:00AM
Zacks
Clothing brand licensing company Iconix Brand Group
Inc. (ICON) has acquired the remaining 50% interest in
Iconix Latin America from its joint venture partner, New Brands
Group, S.A. for $42 million in cash. Iconix had formed Iconix Latin
America in Dec 2008 with 50% stake in the joint venture.
The decision to acquire the remaining 50% interest in Iconix
Latin America comes at the right time when the business in the
region is growing impressively. Since 2008, the company’s royalty
revenue from its iconic brands has increased fourfold in the
region, particularly in Brazil, Mexico, Chile and across Central
America.
Iconix seeks to monetize its brands through these international
joint ventures, which have contributed meaningfully to the
company’s revenues. Besides Latin America, the company has formed
seven international joint ventures since 2008. In 2013, the company
formed four new international joint ventures in Canada, Australia,
Southeast Asia and Israel. Other previous joint ventures include
Iconix China, Iconix Europe and Iconix India.
New York-based Iconix has also acquired a number of brands and
formed domestic joint ventures in the recent past. The most recent
and accretive acquisitions were of Lee Cooper (Feb 2013) and Umbro
brands (Dec 2012). In Feb 2013, the company also formed a joint
venture with Buffalo International and expanded its portfolio into
Canada.
The company also purchased an approximately 14.4% minority
interest in Complex Media, a multi-media lifestyle company and
owner of Complex magazine and its online counterpart, Complex.com
in Sep 2013. In Jul 2013, the company purchased a 10% minority
interest in Marcy Media, which is a multi-media portfolio company.
In May 2013, Iconix acquired the remaining 49% interest in IP
Holdings Unltd LLC ("IPHU") and owns brands such as Ecko Unltd. and
Marc Ecko Cut & Sew.
With these joint ventures and global brands, the company’s
international business contributes 37% of the total business, up
from 24% in 2012. For 2014, the company expects revenues from its
non-consolidated joint ventures to be approximately $44
million.
We remain impressed with Iconix’s strategic acquisitions and
consistent expansion of licensing agreements. Iconix expects to
explore additional opportunities and enhance its portfolio with
more iconic brands in the upcoming quarters. Iconix holds a Zacks
Rank #1 (Strong Buy).
Other Stocks to Consider
Investors interested in the consumer discretionary sector
include Hanesbrands Inc. (HBI), Joe’s
Jeans Inc (JOEZ) and Michael Kors Holdings
Ltd (KORS), all with a Zacks Rank #1 (Strong Buy).
HANESBRANDS INC (HBI): Free Stock Analysis Report
ICONIX BRAND GP (ICON): Free Stock Analysis Report
JOES JEANS INC (JOEZ): Free Stock Analysis Report
MICHAEL KORS (KORS): Free Stock Analysis Report
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