Creating memorable images is certainly an area where Candie’s has some experience, given its latest campaign with Ashlee Simpson or the notorious advertisements from 1997 that showed Jenny McCarthy, the MTV and Playboy Channel poster child for potty humor, sitting on a toilet with her panties pulled down around her ankles.
The transformation has been relatively successful, as the company’s stock has more than doubled its value of the last year with a 111.4 percent increase. Shares of the firm picked up 2 cents, or 0.5 percent, Friday to close at $4.44 in Nasdaq trading. Its revenues for the six months ending July 31, reflecting the shift to licensing royalties, fell 43 percent to $47.9 million, while earnings were $551,000 as compared with a loss of $3.1 million a year earlier.
The acquisition of Badgley Mischka, which will be paid with shares of Candie’s common stock, will bring Candie’s into a different market segment. Cole stressed that any future products under the label will respect its designer heritage, but both he and the designers feel there will be a logical transition of the Badgley Mischka brand from the more designer-oriented environs of Escada to Candie’s less rarefied world.
Candie’s had 18 licensees for Candie’s and Bongo prior to the deal with Badgley Mischka, which now brings its total to 20. The immediate focus will be on finding a production partner, as well as targeting additional licensing opportunities beyond Badgley Mischka’s two existing deals — one with Pronovias USA for bridal gowns, and another for fur coats with BC International.
“Yes, we’ve been marketing to teenagers for the last 25 years, but we have been looking for a way to diversify our business,” Cole said. “We see great potential in Badgley Mischka in accessories, certainly footwear or handbags are a no-brainer, but we’re going to be exploring natural brand extensions.”