Iconix Brand Group Inc. has acquired the remaining 50 percent of Iconix China from its joint venture partner, Novel Fashion Brands Ltd., owned by the Chou family, for $56.4 million. Iconix paid $40.4 million of the total in cash and the other $16 million was paid in the company’s common stock.
“We view China as a major growth opportunity. Through Silas and Veronica Chou’s expertise and relationships, Iconix China has successfully launched nine of our brands with more than 900 standalone stores, shop-in-shops and counters throughout China,”said Neil Cole, CEO of Iconix, in a statement. “Now that our business has gained sufficient scale, we have decided to acquire management and control of the business, consistent with the next phase of our international growth strategy.”
The business model of Iconix China, which was formed in September 2008, differed significantly from that of Iconix’ traditional licensing model.
The China-based company focused on “attracting entrepreneurs and fast-growing local Chinese companies, providing them with an Iconix brand in which they invest through the build-out of stand-alone stores and shop-in-shops, and in return Iconix China receives an equity stake in the newly formed venture,” the company explained in a statement.
Iconix China has placed several major brands, including Candie’s and Marc Ecko Cut & Sew with Shanghai La Chapelle Fashion Co. Ltd, London Fog with China Outfitters, Ed Hardy with Landmark International, Ecko Unltd. with Xi Ha Clothing, Badgley Mischka with Eve NY and Joe Boxer with Northeast Socks.
The acquisition gives Iconix full control and ownership of Iconix China, “which owns equity stakes in two joint ventures with the recently public Shanghai La Chapelle that can be put to Shanghai La Chapelle for cash; publicly traded shares in China Outfitters; equity stakes in an additional six retail ventures, of which four have plans to go public in the next 5 years; control over a portfolio of 15 unplaced brands; and an office and staff in Hong Kong dedicated to Iconix China,” the company said in a statement.