K-Swiss Inc. has completed the sale of Royal Elastics, the company's laceless fashion footwear brand, to REH, an investment group led by Royal Elastics' LA-based Product Design Director. The sale, which includes the company's worldwide rights to the Royal Elastics brand, certain existing inventory, and other selected assets, is expected to result in a gain of $1.4 million, or 4 cents a share, in the second quarter of 2009. Terms of the sale were not disclosed.

Commenting on the announcement, Steven Nichols, chairman of the board and president, said, “We believe this new investment group understands the core essence of the Royal Elastics -swissbrand and are confident they will take the brand to a higher level.”

In November 2001, K-Swiss acquired the worldwide rights and business of Royal Elastics, an Australian-based designer and manufacturer of elasticated footwear. The purchase excluded distribution rights in Australia, which were retained by Royal Management Pty, Ltd. In the third quarter of 2005, Royal Elastics launched a new collection that is part of a long-term licensing partnership to produce a footwear line for L.A.M.B., the clothing line founded by singer Gwen Stefani.


On 2008, Royal Elastics brand revenues decreased 19.7% to $12.8 million (27% of which were derived from domestic sales) from $16 million in 2007 (36% of which were derived from domestic sales).

K-Swiss will report earnings for the first quarter of 2009 on May 7.