Global Brand Marketing Inc. was almost as secretive about the sale of the Pony brand as it was about acquiring it three years ago. GBMI, which holds a majority interest in the brand they acquired in March 2003, announced late Friday that it had sold its stake in the company to Sharp Gain Profits Limited, a member of the Symphony Holdings Group based in Hong Kong. Minority partners The Firm Shoes, Inc. and Itochu International, Inc. have also sold their interest in the company, giving SGP full ownership of Pony International, LLC.
Word on the street is that David Edwards, a former Nike exec who has been working as a consultant to athletic footwear companies, will head up the new company. The current management team is expected to remain intact and based in Southern California.
When he first signed the deal for Pony, GBMI Founder and CEO Killick Datta said that the brand was best positioned as a non-performance fashion brand. Anyone that has sat with Killick saw his passion for the brand, but the cost of continually developing new skus that may or may not make it to market probably took its toll on GBMI.
In a statement released Friday, Mr. Datta said that they had “significantly improved the financial strength of GBMI” and are now “poised for further growth, both organically and through additional acquisitions and/or licensing opportunities.”
The Pony business looked to be picking up in the chain store channels. Based on POS data from SportScanINFO, The SportsOneSource Group estimates that the brand saw sales at retail segments tracked by SSI jump nearly 300% in the year-to-date period through March, due primarily to a real shift in the business to the Family Retailer strata, which includes Family Footwear and the Department Store business.
Based on the SSI data, the brand was positioned almost exclusively in the Sports Retailer strata and igniter accounts in the March YTD period last year, but saw nearly 56% of its business generated out of the Family Retailer strata for the same period this year.
The business at retail started to accelerate in December 2005 and keeps moving higher as this year progresses. Sales at retail tracked by SportScanINFO were up more than 370% last week, driven almost entirely by success of the Mexico 77 and the womens Dash.
Diesel apparently continues to drive the GBMI business and looks to be moving into some of the same retail channels in a bigger way. Based on SSI data, sales of Diesel products have skyrocketed since last spring, primarily in the Family Footwear channel where the low-profile, or euro-casual, fashion athletic looks are getting a lot of play in middle America right now.
Industry sources have Ponys annual wholesale sales pegged at roughly $50 million and the deal valued in the $15 million to $20 million range.
GBMI will consult with Sharp Gains Profits Limited under a management services contract and will assist with components of the transition for a limited period following the closing of the sale.
Prior to the 2003 deal, which had been developed secretly under the name Brand Six, Pony International was owned by The Firm and distributed by ACI International.
>>> The excitement about the possibilities of this brand were very evident when talking to the management team, but there also had to be frustration that so little was sticking on the wall after so much was developed for market
>>> Going up against Puma in the fashion athletic business is no easy task right now and Diesel also had to be gobbling up the OTB dollars Pony had hoped to snag…
>>> Will this infusion give GBMI the cash to fuel continued growth???
