Iconix brand group divests sharper image in $100 million cash deal

by Stephen Garner

iconix-brand-group logoIconix Brand Group, Inc. has announced that it has signed an agreement to sell the rights to the Sharper Image brand and related intellectual property assets to ThreeSixty Group, the brand’s largest licensee, for $100 million in cash.

The company plans to use the net proceeds from this transaction plus additional cash to pay down approximately $115 million of debt, a portion of which will be used to pay down the company’s senior secured notes issued under the company’s securitization facility and a portion of which will be used to pay down the company’s senior secured term loan.

This transaction is expected to close on December 30, 2016. This transaction is not reflected in the company’s current guidance; however, the company expects to record a gain on this transaction. For 2017, the company expects the net impact of the sale of the Sharper Image brand and the repayment of debt to be neutral to earnings.

“Sharper Image is a strong and widely recognized brand, however, consistent with the vision we outlined during our recent investor day, Sharper Image did not fit into our go-forward strategy,” said John Haugh, chief executive officer of Iconix. “After careful consideration, we determined that we could better leverage our resources and generate greater returns by focusing on other areas of the business. This transaction generates a significant return on investment, and allows us to make progress on delivering the balance sheet, which is a top priority. Portfolio management will continue to be a key focus for the company; Sharper Image is the second brand that Iconix has sold this year.”

Iconix Brand Group, Inc. owns, licenses and markets a portfolio of consumer brands including: Joe Boxer, London Fog, Rocawear, Starter, Zoo York, Umbro, Ecko Unltd., and Marc Ecko. In addition, Iconix owns interests in the Ed Hardy, Modern Amusement, Nick Graham, and Pony brands.