NEW YORK, April 27, 2011 /PRNewswire via COMTEX/ --
Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix" or the "Company"), today announced it has acquired the worldwide master license for the Ed Hardy(R) brand from Nervous Tattoo. Through this transaction, the Company will gain control of the licensing and marketing functions, and increase its total ownership stake in the Ed Hardy brand to 85%. Previously, the Company had a small investment in the brand through its joint venture with Don Ed Hardy.
On a pro-forma consolidated basis, the Company estimates that the Ed Hardy brand will generate total annual royalty revenue of approximately $15-16 million.
Neil Cole, Chairman and CEO, Iconix stated, "We are excited to be able to utilize our marketing and licensing expertise to reenergize the Ed Hardy brand. The brand has an extremely high level of consumer awareness in the United States as well as very strong international business, and we believe our Company will be able to add real value."
Don Ed Hardy, commented, "I am thrilled that Iconix has assumed control of the brand. This is exactly what I had envisioned two years ago, when I first partnered with Neil and his team. Iconix has a proven track record and I trust my namesake brand in their hands and look forward to a bright future."
Iconix paid $55 million plus a $7 million earn-out for this acquisition. As part of the transaction, Nervous Tattoo, who will continue as a licensee for Ed Hardy t-shirts, hats and hoodies, will pre-pay $7 million in royalties under its license.
With its increased stake, the Company will now fully consolidate the Hardy Way financials and Don Ed Hardy's 15% will be reflected in minority interest. Going forward, Ed Hardy will no longer be included in the Company's equity earnings on joint ventures line in its income statement. Further, any non-cash gains relating to this transaction are not included in the Ed Hardy estimates.
Don Ed Hardy and his artwork date back to 1967 when Hardy transformed the tattoo business into an artistic medium. Hardy is known as "the godfather of modern tattoo" for his sophistication, depth and sense of experimentation. Today Ed Hardy is a global consumer products brand sold in over 40 countries and 30 different categories including swimwear, fragrances, energy drinks, home goods and bags.
Iconix Brand Group, Inc. 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) OCEAN PACIFIC(R), DANSKIN (R) ROCA WEAR(R), CANNON (R), ROYAL VELVET (R), FIELDCREST (R), CHARISMA (R), STARTER (R) and WAVERLY (R). In addition, Iconix owns an interest in the ARTFUL DODGER (R), ED HARDY (R), ECKO (R), MARC ECKO (R), ZOO YORK (R), MATERIAL GIRL(TM) and PEANUTS (R) brands. The Company licenses its 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 worldwide. Through its in-house business development, merchandising, advertising andpublic relations departments Iconix manages its brands to 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", "estimate", "expect", "confident", "continue", "will", "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. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
Iconix Brand Group
SOURCE Iconix Brand Group, Inc.