Iconix Brand Group Inc. signed an agreement to sell the rights to the Sharper Image brand and related intellectual property assets to ThreeSixty Group, the brand’s largest licensee, for $100 million in cash.
John Haugh, chief executive officer of Iconix, commented, “Sharper Image is a strong and widely recognized brand, however, consistent with the vision we outlined during our recent investor day, Sharper Image did not fit into our go-forward strategy. After careful consideration, we determined that we could better leverage our resources and generate greater returns by focusing on other areas of the business. This transaction generates a significant return on investment, and allows us to make progress on de-levering the balance sheet, which is a top priority. Portfolio management will continue to be a key focus for the company; Sharper Image is the second brand that Iconix has sold this year.”
The company plans to use the net proceeds from this transaction plus additional cash to pay down approximately $115 million of debt, a portion of which will be used to pay down the company’s senior secured notes issued under the company’s securitization facility and a portion of which will be used to pay down the company’s senior secured term loan.
This transaction is expected to close on December 30, 2016. It is not reflected in the company’s current guidance; however, the company expects to record a gain on this transaction. For 2017, the company expects the net impact of the sale of the Sharper Image brand and the repayment of debt to be neutral to earnings.
Sharper Image was the second brand to be divested in 2016. In March, the rights to Badgley Mischka IP were sold to Titan Industries Inc. for $16 million.
Iconix’s brands include Candie’s, Bongo, Joe Boxer, Rampage, Mudd, Mossimo, London Fog, Ocean Pacific, Danskin, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Zoo York, Umbro, Lee Cooper, Ecko Unltd., Marc Ecko, Artful Dodger and Strawberry Shortcake. In addition, Iconix owns interests in The Material Girl, Peanuts, Ed Hardy, Truth Or Dare, Modern Amusement, Buffalo, Nick Graham and Pony.
