Iconix Brand Group to Acquire Mossimo, Inc.

Iconix Brand Group, Inc. has signed, in two separate transactions, definitive agreements to acquire Mossimo, Inc. and the Mudd trademark.

Mossimo

Iconix will, subject to the terms and conditions of the merger agreement, acquire all of the outstanding shares of Mossimo, Inc. for $7.50 per share, comprised of $3.25 a share in Iconix stock and $4.25 in cash. The total purchase price for Mossimo, Inc. will be approximately $119 million subject to a potential one time adjustment of up to an additional $16 million in Iconix stock to be issued if the Iconix stock price does not appreciate to a level that would value the deal at $8.50 per share within one year of closing. Under the terms of the merger agreement, Mossimo, Inc. will have $17 million of cash in the company that Iconix will acquire upon closing. The Mossimo brand is projected to generate $20 – $25 million in 2007 royalty revenue.

The transaction has been approved by the respective Board of Directors of both Iconix and Mossimo, Inc. The merger is subject to approval by the stockholders of Mossimo, Inc., clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt by Mossimo, Inc. of a fairness opinion, and other customary closing conditions and is expected to close in July of 2006.

Mossimo, Inc. designs apparel and related products, primarily under the Mossimo label and licenses them to Target Corporation, which has exclusive rights for production and distribution of all Mossimo branded products sold in the United States. The Mossimo brand is licensed to third parties in Australia, New Zealand, South America and Mexico. As part of the transaction, Mossimo Giannulli, founder and chairman of Mossimo, Inc., will join Iconix as creative director for his namesake brand and will continue to work to build the Mossimo business domestically and worldwide.

Mudd

The company also announced that it will acquire, subject to the terms and conditions of the asset purchase agreement, the Mudd brand from Mudd (USA) LLC, a Delaware company controlled by the Tack Fat Group International Limited, a publicly traded apparel company based in Hong Kong. The estimated purchase price is $88 million, comprised of approximately 50% cash and 50% Iconix stock. The company will be assuming eleven existing license agreements for Mudd and will enter into a new agreement under which the Mudd brand name will be licensed for use in the core denim business to Mudd (USA) and the brand's founder Dick Gilbert. The acquisition is still subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and expected to close in April. The Mudd brand is estimated to generate between $18 and $20 million in 2007 royalty revenue. The cash portion of the acquisition will be financed through an increase of the current asset-backed notes issued by a subsidiary of the company, which are secured by the intellectual property of the subsidiary and are due at the end of 2012. The financing was arranged by UCC Capital, a leader in financing for companies with core assets in intellectual property and contractually obligated income. UCC Capital has worked with the company in the past to finance its acquisitions of the Joe Boxer and Rampage brands.

Mudd was founded in 1996 and today markets lifestyle products under the Mudd brand name in the girls and juniors markets. The Mudd brand's distribution today includes moderate department stores and specialty store chains.

Strategic Outlook

Neil Cole, Chairman and CEO of Iconix, stated, “We are very pleased with these two acquisitions which are expected to further diversify our revenue stream, strengthen our licensing and brand management platform and provide us with significant growth opportunities for the future. Our ability to attract powerful lifestyle brands and seamlessly integrate them into our business supports our leadership position in the marketplace and the compelling nature of our licensing model. Our goal is to maximize our existing brands, while at the same time aggressively pursuing strategic acquisitions.”

“Mossimo is one of the largest apparel brands in the United States distributed exclusively through one of the biggest and most exciting retailers in the world and we are thrilled to be in a position to add it to our growing portfolio of strong consumer brands which currently includes Candie's, Bongo, Badgley Mischka, Joe Boxer and Rampage,” Mr. Cole continued. “This would be a nicely accretive transaction and one that we believe would be a strong driver of our earnings for many years to come. With the addition of Mossimo and Mudd, we project that the Iconix portfolio of brands would generate $3.5 billion in annual retail sales.”

Mossimo Giannulli, Chairman and CEO of Mossimo commented, “Iconix has created something very exciting and has developed the licensing model into a business of much greater scale, diversification and synergy. Adding the Mossimo brand to this exciting platform is a compelling way to generate value for our shareholders and I look forward to working with the Iconix team to continue to develop Mossimo to its greatest potential both domestically and around the world.”

Mr. Cole further commented, “Over the past 10 years, Mudd has been one of the most dominant junior brands in the United States. Not only are they recognized as leaders in denim, but they have a large and established licensed business in footwear, handbags, kid's apparel, eyewear and watches. This acquisition would further diversify our revenue base and enhance our penetration within the youth market.”

Dick Gilbert, the founder of Mudd and President of Mudd USA, commented, “I am glad to be continuing on with Iconix as their new jeans wear licensee. This deal would add the missing ingredient to our formula. Mudd has become the dominant and ubiquitous brand that it is today by leveraging our expertise in product and design. As a result of this transaction we would have the support of a strong marketing and brand management company to take Mudd to the next level.”

UCC Capital, a leader in financing intellectual property and contractually obligated income, served as the Company's investment banker in both transactions.

Earnings Outlook

Based on the two acquisitions announced today, and the assumption that the Mossimo transaction closes in the third quarter and Mudd in April, Iconix updated its earnings guidance for fiscal 2006. The company now believes its earnings per share for fiscal 2006 will be in the range of 75 cents to 80 cents per fully diluted share compared to its previous guidance range of 65 cents to 70 cents.