California Apparel News

Iconix Brand Group Inc., the New York–based owner of the Candie’s, Badgley Mischka, Joe Boxer and Bongo trademarks, purchased the Rampage brand for $45.9 million from Commerce, Calif.–based Rampage Clothing Co., founded by Larry Hansel in 1982.

The deal includes a licensing agreement with Larry Hansel Clothing LLC for the core Rampage sportswear collection. According to Iconix, the licensing agreement is expected to generate up to $11 million in 2006.

“We did some research, found that the brand is very strong across America and decided to go forward,” said Neil Cole, chairman and chief executive officer of Iconix.

The deal allows Iconix to fill in a few holes in the company’s lineup and its distribution chain, Cole said.

“It’s more of a contemporary label than Candie’s and Bongo, which are a little more junior,” he said. “Rampage has a very sophisticated, young, contemporary feeling to it. We thought it was different enough [from Candie’s and Bongo] and exciting, so we went forward.”

In December, Iconix struck a deal with Menomonee Falls, Wis.–based retailer Kohl’s Corp. to distribute the Candie’s apparel and footwear collection at Kohl’s stores. Candie’s is currently sold in several department stores and specialty stores, but by 2007, the line will be exclusively sold at Kohl’s.

“With Candie’s exclusively at Kohl’s hellip; we wanted to continue doing business with the department stores,” Cole said. “Rampage has a great relationship with the better department stores.”

Iconix is expecting a smooth transition, thanks to the licensing agreement with Hansel, Cole noted.

“[Larry is] going to continue doing what he’s been doing; we just take over the licensing part of the business, and we get to keep some great continuity with the operations.”

Plus, Cole said, there’s plenty of room to grow the Rampage brand into new categories. In addition to the core Rampage sportswear collection, Iconix will pick up Rampage’s 12 licensing agreements for categories including swimwear, lingerie, outerwear, footwear, accessories and fragrance; distribution in Mexico and South America, the Middle East, Thailand and the Philippines; as well as the company’s agreement with San Diego–based retail chain Charlotte Russe, which operates about 70 mall-based stores under the Rampage nameplate.

“We see a lot of opportunity in places like denim, dresses, home, childrenswear—those are four categories that we see strong potential to expand the Rampage brand,” said Cole.

Looking to the West

This is not the first time Iconix has looked west for new business. The company, then called Candie’s Inc., was launched in 1981 by Cole (brother of footwear and clothing maker Kenneth Cole). The company enjoyed success as a private label and branded-footwear maker, launching its iconic and sexy wood-sole shoe. In 1998, the company purchased Los Angeles–based denim brand Bongo, eventually moving the company to New York. Earlier this year, the company picked up San Francisco underwear and loungewear maker Joe Boxer.

Recently, the company turned its attention to the high-end market, purchasing New York–based eveningwear house Badgley Mischka last year. After acquiring the eveningwear brand, the company changed its name to Iconix to reflect its diverse mix of labels.

Cole said he had no plans to move the Rampage label to the East, particularly since its new licensee is based in Los Angeles.

Rampage on the block

In its 23-year history, Rampage has enjoyed enormous growth and success—as well as dramatic setbacks.

After rapid growth in the mid-1990s, the company sought Chapter 11 bankruptcy protection in 1997, emerging in 1999 as a leaner operation that split the company into manufacturing and licensing units.

Paul Buxbaum, whose Buxbaum Group owned 50 percent of Rampage Clothing after helping the juniorwear manufacturer skirt a second Chapter 11 filing in 2003, had been trying to sell Rampage for some time. Buxbaum said the deal with Iconix closed on Sept. 15, after a few months of negotiations. The purchase price reflects $25.8 million in cash and $20.1 million in company stock.

“It is a great thing for the brand’s future because with Iconix’s expertise as brand managers, it can only help the future strength of the Rampage name and brand in the marketplace,” he said.

After the sale, Hansel bought all the assets of Rampage Clothing, such as furniture, equipment and inventory orders, and liabilities owned by the old Rampage to continue his operations in Commerce.

The licenses to produce denim and dresses still have not been settled, Buxbaum said. Also the childrenswear license has just become available.

Despite Rampage’s ups and downs, industry analysts were bullish about the acquisition.

“For Iconix, it’s a smart buy,” said Jeffrey Van Sinderen, an analyst with Los Angeles–based B. Riley & Co., who tracks retail stores, including Rampage stores. “There were a number of—maybe two or three—players interested in this brand.

It’s an attractive property; it doesn’t hurt to have the Rampage business at Charlotte Russe starting to turn around.”

While Iconix will look for ways to grow the Rampage brand, it will also keep an eye out for potential candidates for future acquisitions, Cole said.

“We see a lot of good opportunities,” he said. “We are continuing to not only aggressively grow our brands organically, but we’re looking for great brands to add to our portfolio.”

Deborah Belgum and Andrew Asch also contributed to this story.