Iconix Brand Group, Inc.'s Q3 revenues rose 8% to $59.4 million. Profit rose 25% to $20.5 million, or 28 cents per share.
Iconix also agreed to buy a 51% stake in Ecko Brands New York, whose brands include Ecko Unlimited, Marc Ecko, and Zoo York. Iconix will pay $63.5 million for its stake, and the joint venture will get $90 million in financing. About $42 million to $44 million in annual royalty revenue is expected from the JV. Marc Ecko will continue as chief creative officer.
On a conference call with analysts, Neil Cole, ICON chairman and CEO, cited particular success with its direct-to-retail (DTR) brands licensed directly to retailers. DTR brands accounted for 50% of revenue in Q3, up from 20% last year. Walmart's DTR brands, Starter and Danskin Now, “have been performing well and we are excited about the growth opportunities in the fourth quarter and into next year, as it will be the first full year of the launch,” Cole said. OP, another Walmart DTR brand, had an “outstanding” spring/summer season but the breadth of the product has been reduced for fall.” At Kohl's, MUDD has seen a strong launch and Candie's has been trending up the last couple months. Mossimo, at Target, had been comping down for the first half, but has turned positive recently.
With wholesale brands, the Rocawear women's license was transitioned due to financial problems with the licensee. The new licensee has started shipping to accounts, and the overall brand continues to benefit from its founder, rapper Jay-Z.
Ed Hardy, a joint-partnership, continues to grow as it enters new categories and expands outside the U.S.
