The Finish Line Inc. last week threw in the towel on its long underperforming Man Alive chain. The company agreed to pay $7 million in cash to Man Alive Acquisition LLC, which is controlled by Jimmy Jazz stores owner and operator Jimmy Khezrie, to assume certain Man Alive assets and liabilities.


The agreement includes Man Alive's 75 retail stores under the Man Alive and Decibel names as well as trademarks. Leasehold interests and lease liabilities are also included in the deal Jimmy Jazz, the Brooklyn-based urban retailer, has more than 80 stores on the East Coast.


Under the agreement, Finish Line will pay up to $5 million to the Khezrie entity at closing, with the rest of the payments being made in 12 equal monthly installments. Finish Line will take a pre-tax charge of $13 to $18 million related primarily to inventory and long-term asset write-offs.
Finish Line bought the locally based Hip Hop-themed Man Alive chain for $12 million in 2005 and quickly tripled its store count. But same-store sales and margins have been falling due to a downturn in the urban fashion market.  Finish Line showed an operating loss of $13.2 million loss from Man Alive for the year ended Feb. 28.


According to its most recent Form 10-K, FINL impaired $12.1 million of intangible assets, including goodwill, and $14.4 million of long-lived assets related to Man Alive last year.


The Finish Line most recently said it was exploring “all strategic alternatives” to improve Man Alive's financial performance, and in April had converted four Man Alive stores a new concept, Decibel, that offered “street fashion” aimed at a broader audience than Man Alive. The test of Decibel was scheduled to run at least six months.


“This transaction will allow us to exit our unprofitable Man Alive business and focus our time and resources on our successful core Finish Line business and thereby generate enhanced shareholder value,” said Glenn Lyon, the company's CEO. “We are confident that MA, through the guidance of Jimmy Jazz, an established and growing leader in the urban apparel market, will help Man Alive achieve its true long-term potential.”

Jimmy Jazz, based in Brooklyn, New York, has been aggressively expanding this year despite the recessionary climate. New stores have been opened in Ohio, Michigan, Georgia, South Carolina, New York, Pennsylvania, and Virginia. It plans on entering Florida before the end of 2009.