NEW YORK--(BUSINESS WIRE)--May 20, 2003--Candie's, Inc.
(Nasdaq:CAND) (the "Company") provided additional information today
about its new licensing plan following the Company's announcements
earlier this month that it had licensed the exclusive right to
manufacture, sell and distribute footwear under the CANDIE'S(R) brand
to Steven Madden, Ltd. (Nasdaq: SHOO) ("Steve Madden") and under the
BONGO(R) brand to Kenneth Cole Productions, Ltd. ("KCP").
With the addition of the Candie's and Bongo footwear licenses, the
Company now has granted 14 licenses, five for the Candie's brand for
footwear, apparel, fragrance, eyewear and watches, and nine for the
Bongo brand for footwear, tops, kids jeans wear, eyewear, handbags,
cold weather accessories, swimwear, belts and jewelry. Together these
licenses guarantee the Company over $40 million in minimum guaranteed
royalty and advertising revenue over the current term of the licenses,
not including any renewal terms. These guaranteed amounts do not
include any licensing income from CANDIE'S apparel after the end of
the license with Gadzooks, Inc., which is exclusive through the end of
the fiscal year and terminates in August 2004, and are in addition to
the guaranteed minimum income to the Company of $1.7 million
guaranteed by Sweet Sportswear LLC ("Sweet"), the third party manager
of the BONGO jeans wear business.
Neil Cole, President and CEO stated, "Exciting opportunities for
growth still exist with respect to our ability to license or enter
into other profitable arrangements for CANDIE'S and BONGO for jeans
wear and a variety of other apparel categories. These areas have
typically offer significant revenue streams because of the large range
of products that can be developed. Consumers already see both the
CANDIE'S and BONGO brands as representing cutting edge fashion at
competitive prices, which we believe will translate very well into
valuable licenses for a variety of products."
The Company believes that the transition from its footwear
operating business will be complete by the end of July following
shipment of Spring 2003 goods. Both Steve Madden and KCP will commence
shipments with the Fall 2003 season. The Company plans to close its
Valhalla office by that time and relocate all remaining employees to a
smaller office in New York City. The Company anticipates operating the
new licensing company initially with no more than 15 employees, with
the largest department being the advertising and marketing department.
Under all licenses for both CANDIE'S and BONGO, the Company retains
full rights to advertise and market the brands and will be collecting
guaranteed contributions from its licensees to carry out those
"We believe that the licensing model will allow us to capitalize
on our core competencies of marketing and brand development, while
substantially reducing our overhead and the risks of inventory
management. Under this new plan, we are projecting increased net
profits and reduced cash requirements, which will allow the Company to
use its cash more strategically and position us for growth and
profitability," Mr. Cole stated.
With respect to its retail operations, the Company is planning on
closing its 11 concept stores, which have not performed according to
expectations. It will continue to operate 10 outlet stores at least
through the end of the year. The Company will be able to purchase
CANDIE'S footwear from Steven Madden and BONGO footwear from KCP for
those stores at discounted prices. As to seven of those stores the
Company has no long term lease obligations but operates through a
contractual arrangement with Casual Male Retail Group ("CMRG")
pursuant to which the Company has the option to return the operations
of the stores to CMRG with no additional obligation in February 2004.
The Company will also continue to design and manufacture jeans
wear under the BONGO brand through its wholly owned subsidiary,
Unzipped Apparel, LLC, which is managed by Sweet. Over the past year,
BONGO jeans has grown to a $70 million business and is projecting
continued growth in the future.
The Company will continue to own and operate Bright Star Footwear,
LLC its wholly owned subsidiary, which arranges for the manufacture of
casual and outdoor men's footwear products for mass market and
discount retailers under the private label brand of the retailer.
The Company filed its Report on Form 10-K for the year ended
January 31, 2003 on May 16, and plans on releasing results for the
first quarter of the year ending January 31, 2004 during the second
week of June. Additional information about the licensing plan and its
anticipated revenues will be included in the conference call for the
first quarter results.
About Candie's, Inc.
Candie's, Inc. is in the business of licensing the Candie's and
Bongo name on a variety of young women's footwear, apparel and fashion
products, and is a leading designer, distributor and marketer of jeans
wear under the Bongo brand through its wholly owned subsidiary,
Unzipped Apparel, LLC. Candie's also arranges for the manufacture of
footwear products for mass market and discount retailers under the
private label brand of the retailer or other trademarks owned or
licensed by Candie's. The Company operates 21 Candie's retail stores
across the United States. For investor information please visit the
corporate web site at http://www.candiesinc.com.
Forward-Looking Statement Disclosure
The statements which 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 the risks detailed in the Company's Securities and
Exchange Commission filings, and uncertainty associated with the
impact on the company in relation to recent events discussed in the
Company's form 10-K for fiscal 2003. Readers are cautioned not to
place undue reliance on these forward-looking statements.
CONTACT: Candie's, Inc.
Richard Danderline, 914/769-8600
SOURCE: Candie's, Inc.