- Neiman Marcus Plots Growth Strategy
- Salvatore Ferragamo Awarded $4.3M in Online Counterfeit Case
- Macy's Invests $170M in New Fulfillment Center
NEW YORK — Iconix Brand Group continues to expect growth in 2009, with the bulk of it coming from the burgeoning relationship of its brands with Wal-Mart Stores Inc. and the company’s own international expansion.
However, excluding gains from the OP, Danskin Now and Starter brands carried at Wal-Mart, the company expects business to be weaker “across the board,” Neil Cole, chairman, president and CEO, told analysts on a fourth-quarter conference call last Tuesday.
“Each business is going to be challenged with what’s happening with the consumer,” Cole said. “Especially in the first half of the year we’re projecting somewhere [close to] 5 percent to 10 percent down on each brand. Hopefully, we’re going to get some surprises.”
Nonetheless, Cole said investors would see revenue growth in the second half of the year, as Wal-Mart continues to expand internationally and Iconix completes the transition of its Mudd brand to a direct-to-retail licensing relationship with Kohl’s Corp.
Candie’s, another Kohl’s exclusive brand, is slated to reveal it’s newest celebrity spokesperson in the days ahead, which “should create quite a buzz for the brand,” Cole said.
The CEO also was bullish on new initiatives overseas. “Our global expansion plans are progressing, and over the past year, we entered two international joint-venture agreements, one in China and one in Latin America,” Cole said. “We believe by having locally based partners in these regions, we will be more successful in monetizing our brands.”
Iconix also is leaving the door open to acquisitions in the coming months. “We believe in 2009 opportunities will present themselves as the industry consolidates and sellers begin to appreciate the new reality,” said Cole. “We are currently looking at a couple of exciting medium- to large-size deals that we believe could be financed through both traditional and alternative structures.”
Iconix said net income for the fourth quarter ended Dec. 31 fell 10.9 percent to $17.1 million, or 28 cents a diluted share. Year-ago profit was $19.2 million, or 31 cents a share, but came to 27 cents a share excluding a one-time gain of 4 cents a share related to the company’s litigation over its Bongo brand. Revenues grew 14.4 percent to $54.3 million, from $47.4 million.
For the year, profits rose 10 percent to $70.2 million, or $1.15 a share, versus $63.8 million, or $1.04, in 2007. Revenues jumped 35.5 percent to $216.8 million from $160 million the previous year.
“As 2008 unfolded, it became more and more evident that we were heading into one of the most challenging economic times of our generation,” Cole said, adding that the company’s direct-to-retail brands, which are licensed directly to retailers, are becoming “a much larger percent” of its revenue. In 2008, he said they accounted for roughly 25 percent of royalties and should be “well over 50 percent in 2009.”