Brown Shoe Co. said Tuesday it has sold Avia and Nevados to Galaxy Brand Holdings Inc. for $74 million, with the transaction closing immediately.
St. Louis-based Brown said it plans to use the proceeds from the sale to pay down debt, which stood at $198.8 million as of Feb. 2.
Brown Shoe had acquired Avia and Nevados as part of its American Sporting Goods acquisition in February 2011, for $145 million and assumed debt. In October 2011, Brown sold the And 1 brand, which also was part of the ASG acquisition, to Galaxy International, an affiliate of Galaxy Brand Holdings, for $55 million.
“Although we were not actively marketing Avia for sale, it’s a great brand with a strong heritage that appealed to Galaxy Brand Holdings. As a result, they made an offer which we believe is in the best interest of our shareholders to accept,” Diane Sullivan, president and CEO of Brown Shoe, said in a statement. “We’re excited about continuing to expand and strengthen the Ryka brand, which is the most integral and relevant part of the ASG acquisition.”
Eddie Esses, CEO of New York-based Galaxy Brands, said in a statement, “We are excited by the tremendous potential in both Avia and Nevados, and look forward to building on their foundations in the athletic and outdoor space … in both domestic and international markets.”
Brown Shoe expects the deal to result in a charge of between $15 million and $17 million, or 28 cents and 33 cents a share, for the full year. Shares closed Tuesday at $17.40 and remained unchanged after hours.
Brown Shoe will announce its first quarter results before market opens on Wednesday, May 29.