Iconix Brand Group Announces Definitive Agreement to Purchase Rocawear(R) Brand
March 06 2007 - 8:00AM
PR Newswire (US)
* Rocawear founder and cultural icon Shawn 'Jay-Z' Carter to
continue as chief creative officer NEW YORK, March 6
/PRNewswire-FirstCall/ -- Iconix Brand Group, Inc. (NASDAQ:ICON)
("Iconix" or the "Company"), today announced that it has entered
into a definitive agreement to purchase the brand Rocawear. The
purchase price will be $204 million in cash with contingent
payments of an additional $35 million of Iconix stock based upon
the brand surpassing certain pre-determined performance thresholds
over the next three to five years. Rocawear is a leading lifestyle
apparel brand sold through better department and specialty stores
with annual retail sales of over $700 million. Rocawear co-founder
Jay-Z will be in charge of all product development, marketing and
licensing for Rocawear. Jay-Z's senior management team in
licensing, marketing and product development will also join Iconix.
He will retain his stake in the operating company that manufactures
all of the Rocawear men's apparel and his two partners in that
business, Alex Bize and Norton Cher, will continue to run that
company and enter into a long-term license agreement with Iconix
for the core young men's apparel category. Iconix is forecasting
that the Rocawear brand will generate approximately $43 million in
royalty revenue in its first twelve months under the Iconix
umbrella. As part of the transaction, Iconix will also enter into a
separate equal joint venture with Shawn Carter to establish a new
brand management and licensing company that will identify brands to
be acquired and/or developed across a broad spectrum of consumer
product categories using the Iconix model. The first brand will
involve Jay-Z and will be an eponymous luxury brand called "Shawn
Carter Collection" which will debut in 2008. Neil Cole, Chairman
and CEO of Iconix Brand Group commented, "This is the largest
acquisition Iconix has made and Rocawear is a brand that is
increasing in market share and has extraordinary potential for
growth. The leadership team is already in place to fulfill our
mission and we will maintain complete continuity within the
business by having Jay and his team in charge of all product
development, licensing and marketing. Jay and his partners in the
operating company that manufactures all of the Rocawear men's
apparel, Alex Bize and Norton Cher, will become our licensee for
the core business. Iconix will add talent and resources that I
believe will help make Rocawear a billion dollar global brand. This
acquisition will be transformative for Iconix in terms of its
scale, the diversification it brings to our portfolio of brands as
well as having someone as talented as Jay-Z joining our company and
the many synergies that could bring." Shawn Carter, co-founder of
Rocawear, commented, "Iconix is pioneering a new brand management
model and by combining Rocawear with their platform, my team and I
can focus on our strengths in design and lifestyle marketing."
Carter added, "I'm also looking forward to working with Neil Cole
and the Iconix organization on other brand development
opportunities." The purchase price for the acquisition will be paid
by Iconix in cash from proceeds of a loan made to the Company by
one or more affiliates of Lehman Brothers Inc. The acquisition is
anticipated to close in March 2007 and is subject to customary
closing conditions including clearance under the Hart- Scott-Rodino
Anti Trust Improvements Act of 1976, as amended. Iconix Brand Group
Inc. (NASDAQ:ICONNASDAQ:-NASDAQ:News) owns, licenses and markets a
growing portfolio of consumer brands including CANDIE'S (R), BONGO
(R), BADGLEY MISCHKA (R), JOE BOXER (R) RAMPAGE (R), MUDD (R),
LONDON FOG (R), MOSSIMO (R) and OCEAN PACIFIC (R). The Company has
also entered into definitive agreements to purchase the brands
DANSKIN (R) and ROCAWEAR (R). The Company licenses it brands to a
network of leading retailers and manufacturers that touch every
major segment of retail distribution from the luxury market to the
mass market in both the U.S. and around the world. Iconix, through
its in-house advertising, promotion and public relations agency,
markets its brands to continually drive greater consumer awareness
and equity. Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995. The statements that are not
historical facts contained in this press release are forward
looking statements that involve a number of known and unknown
risks, uncertainties and other factors, all of which are difficult
or impossible to predict and many of which are beyond the control
of the Company, which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward looking statements. Such factors include, but are not
limited to, uncertainty regarding the results of the Company's
acquisition of additional licenses, continued market acceptance of
current products and the ability to successfully develop and market
new products particularly in light of rapidly changing fashion
trends, the impact of supply and manufacturing constraints or
difficulties relating to the Company's licensees' dependence on
foreign manufacturers and suppliers, uncertainties relating to
customer plans and commitments, the ability of licensees to
successfully market and sell branded products, competition,
uncertainties relating to economic conditions in the markets in
which the Company operates, the ability to hire and retain key
personnel, the ability to obtain capital if required, the risks of
litigation and regulatory proceedings, the risks of uncertainty of
trademark protection, the uncertainty of marketing and licensing
acquired trademarks and other risks detailed in the Company's SEC
filings. The words "believe," "anticipate," "expect," "confident,"
"project," provide "guidance" and similar expressions identify
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward looking statements, which speak
only as of the date the statement was made. Contact: David Conn
Executive Vice President Iconix Brand Group 212.730.0030 Joseph
Teklits Integrated Corporate Relations 203.682.8200 DATASOURCE:
Iconix Brand Group, Inc. CONTACT: David Conn, Executive Vice
President, Iconix Brand Group, +1- 212-730-0030; Joseph Teklits,
Integrated Corporate Relations, +1-203-682-8200 Web site:
http://iconixbrand.com/
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