Iconix Sells Off Sharper Image Brand for $100 Million

Sharper Image Iconix ThreeSixty
Sharper Image.
SharperImage.com

Iconix Brand Group has made another step toward rightsizing its portfolio and paying off its debt.

The New York-based brand management firm announced today that it has unloaded the rights and intellectual property assets of the Sharper Image brand to ThreeSixty Group Inc., the brand’s largest licensee, for $100 million in cash.

Iconix CEO John Haugh said that while Sharper Image, a seller of electronic gadgets, is a “strong and widely recognized brand,” the company no longer believed that the brand is consistent with its vision.

Sharper Image did not fit into our go-forward strategy,” Haugh said in a release. “After careful consideration, we determined that we could better leverage our resources and generate greater returns by focusing on other areas of the business.”

Iconix plans to use the net proceeds from this transaction — which was expected to close on Thursday — toward paying down a $115 million debt.

This transaction generates a significant return on investment, and allows us to make progress on de-levering the balance sheet, which is a top priority,” Haugh said. “Portfolio management will continue to be a key focus for the company.”

Sharper Image is the second brand that Iconix sold this year. In March, the company sold the Badgley Mischka brand to Titan Industries Inc.

Iconix, which spent much of 2015 grappling with top executive departures as well as a U.S. Securities and Exchange Commission investigation, has continued to feel the effects of previous operational challenges.

In November, the firm — which owns Candie’s, London Fog, Material Girl and other brands — reported third-quarter net income of $15.2 million, or 27 cents per diluted share, compared to a net loss of $5.4 million, or 11 cents per diluted share in the previous year. Adjusted net income also advanced 114 percent year-over-year, to $11.1 million, or 19 cents per diluted share, surpassing forecasts for diluted earnings per share of 16 cents. The firm’s licensing revenues remained flat year-over-year, at $90.9 million.

Despite the decent results, management downward-adjusted the company’s full-year outlook to reflect higher than expected professional fees associated with the SEC investigation.

As of 10:30 a.m. today, Iconix shares had gained 3.6 percent, to $9.28.

California-based ThreeSixty made headlines earlier this year when it snapped up the FAO Schwarz brand from Toys R’ Us. The company, which had been a licensee for Sharper Image for nearly 10 years, manufactures and distributes children’s products, home décor and other consumer products for more than 70,000 retail stores in the U.S.

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