Iconix Brand Group, which recently purchased the North American rights to Pony, acquired the remaining 50 percent of Iconix China from its joint venture partner Novel Fashion Brands Limited, owned by the Chou family for $56.4 mill ion, of which $40.4 million was paid in cash and $16 million was paid in the company’s common stock.
The transaction provides Iconix with full control and ownership of Iconix China, which owns equity stakes in two joint ventures with the recently public Shanghai La Chapelle that can be put to Shanghai La Chapelle for cash. The transaction also includes publicly traded shares in China Outfitters, equity stakes in an additional six retail ventures of which four have plans to go public in the next five years, control over a portfolio of 15 unplaced brands and an office and staff in Hong Kong dedicated to Iconix China.
“We view China as a major growth opportunity. Through Silas and Veronica Chou’s expertise and relationships, Iconix China has successfully launched nine of our brands with more than 900 standalone stores, shop-in-shops and counters throughout China,” said Neil Cole, Iconix chairman and CEO. “Now that our business has gained sufficient scale, we have decided to acquire management and control of the business, consistent with the next phase of our international growth strategy.”
Iconix China was formed in September 2008 as a means to attract fast-growing local Chinese companies and provide them with an Iconix brand in which they invest through the build-out of stand-alone stores and shop-in-shops. In return Iconix China received an equity stake in the newly formed venture.
To date, the brands that Iconix China has placed successfully include Candie’s and Marc Ecko Cut & Sew with Shanghai La Chapelle Fashion Co. Ltd; London Fog with China Outfitters; Material Girl with Ningbo Peacebird; Ed Hardy with Landmark International; Ecko Unltd. with Xi Ha Clothing; Badgley Mischka with Eve NY; Joe Boxer with Northeast Socks; and Royal Velvet with Qingdao Hongfang. Candie’s has been the largest brand in the Iconix China joint venture. By 2014, the brand had expanded to more 700 stores and shop-in-shops.
EVP managing director international Willy Burkhardt said, “This transaction will bring us closer to the important Chinese market, help us to identify potential brand acquisitions and develop new business opportunities for our unplaced brands.”
