With direct-to-retail license agreements with Wal-Mart just signed for Starter and for Danskin Now, Iconix Brand Group expects sales for both brands to double in 2008. On Iconix’s Q2 conference call, Neil Cole, Iconix’s CEO, said Wal-Mart is planning for both “to become anchor brands for Wal-Marts active wear and athletic apparel strategy.”
Starter is taking over much of the space formally allocated to Wal-Mart’s private label brand, Athletic Works, and “pretty much making Starter the key sports brand on the male side.” Starter will also be launching in intimate apparel, adding more sports underwear, increasing its sock business, and extending other categories such as watches. Iconix will also launch a major ad campaign including a major NFL star.
On the Danskin Now side, Cole notes that Danskin has a “great sports bra business, and sock business,” but will likewise be extended to all key sports categories on the women’s side. Footwear “is going to be a major category” for both Starter and Danskin.
OP, launched at Wal-Mart in the spring, is in 1,000 doors and will be expanded to additional doors for next spring. Cole said OP has “taken over pretty much the majority of all the swim category” at Wal-Mart, and opened-up footwear and flip flops from OP are now in all doors.
“Were also working on some outposts in the stores, expanding categories, but were pretty excited what happened there,” said Cole. “It was a wonderful reaction. Wal-Mart did an amazing job in executing the product and were pretty encouraged that we think Wal-Mart has the potential to be a huge business as it continues to expand.”
Overall, Iconix, which also owns brands such as Joe Boxer and Rocawear, earned $16.5 million, or 27 cents a share, compared to $14.8 million, or 24 cents per share, a year earlier. Licensing revenue rose 32% to $51.7 million.
