Iconix Brand Group, owner of apparel brands including Candie's and Mossimo, has agreed to buy Danskin for $70 million. The transaction is anticipated to close in March 2007.
Danskin will enter into a license agreement with Iconix to continue to operate the Danskin wholesale business, including its freestanding retail stores and its Internet merchant site, Danskin.com. Carol Hochman, president and CEO of Danskin, and her team will continue as Iconix's licensee to grow the Danskin department and sporting goods store business.
The purchase price for the transaction which includes Danskin's intellectual property – will be $70 million with a contingent payment of $15 million, payable in cash or stock, triggered by the brand exceeding certain revenue and performance targets. If paid in Iconix stock and the stock appreciates during the earnout period, or thereafter, the Company could earn up to an additional $7.5 million.
Donald Schupak, Danskin's chairman said, “The transaction will provide capital for growth of the Danskin wholesale business and, at the same time, monetize its intellectual properties, enhancing opportunities to increase shareholder value. Carol Hochman and her team have done an exceptional job expanding this great brand and implementing a multi-channel distribution strategy in a markedly undercapitalized environment. In addition to providing working capital, Iconix marketing support will help complete the company's vision for the Brand.”
Carol Hochman, CEO of Danskin, commented, “We have made a lot of progress expanding this great brand and implementing our multi-channel distribution strategy but the missing ingredient has been the marketing strategy and investment needed to complete our vision. The Iconix team has exciting plans for Danskin(R) and I am looking forward to working closely with them to grow the business.”
Neil Cole, chairman and CEO of Iconix, said, “Danskin is one of the most established and recognized active wear brands in the world and we are thrilled to add it to our portfolio and to be partnering with Carol and her team as our licensee. Upon closing, this acquisition will further our diversification strategy by giving us a strong presence in the rapidly growing active wear, yoga and fitness market. We are also excited to have the opportunity to work with Wal-Mart on 'Danskin Now.'”
Danskin is a 125-year-old iconic brand of women's active wear, leg wear, dance wear, yoga apparel and fitness equipment. The brand is sold through better department, specialty and sporting goods stores and through its own freestanding Danskin boutiques and its Internet merchant site Danskin.com.
Iconix Brand Group, formerly Candies, has been aggressively purchasing a number of apparel brands in the market and mainly serves as a licensor for the brands. Its roster includes Candie's, Bongo Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo and Ocean Pacific.
