Mossimo Acquisition Delayed
Iconix Brand Group, the New York company that owns several brands such as Candie’s, Joe Boxer and Rampage, will see its acquisition of Mossimo Inc. delayed two months while the Securities and Exchange Commission examines the deal.
Neil Cole, Iconix’s chairman and chief executive officer, said the transaction had been scheduled to close in July, but now it is unlikely to happen before September, while the SEC examines the company’s proxy documents.
Meanwhile, the company is working on finding new avenues to expand the Mossimo brand outside the United States, where it is sold exclusively in Target stores.
“The [Mossimo] business is strong and growing, and we are identifying new international licensing agreements,” Cole said recently in a conference call with analysts.
The chief executive said he expected Mossimo to generate $20 million to $25 million in royalty revenues next year.
Mossimo, based in Santa Monica, Calif., was founded in 1995 by designer Mossimo Giannulli. The company has been licensing its label to Target since 2000, and has become a popular price-conscious apparel line for the discount store chain.
In April, a tug of war erupted over who would buy Mossimo. Iconix made an offer to purchase the company in a deal valued at about $119 million. But then Cherokee Inc., the Van Nuys, Calif.–based company that engineered the Mossimo licensing deal with Target and gets 15 percent of all revenues that Mossimo receives from Target, stepped in and made an unsolicited counteroffer for about $135 million.
In the end, Iconix offered to pay Cherokee $33 million in cash when the deal closes to give up its finder’s fee agreement with Mossimo and withdraw its purchase offer.
In other developments, Iconix filed a lawsuit in New York against the former owners of the Rampage brand for alleged breach of contract. Iconix maintains that Paul Buxbaum and David Ellis, principals in the Buxbaum Group in Calabasas, Calif., withheld information about the annual guaranteed licensing revenue of the Rampage brand. Buxbaum and Ellis did not return phone calls seeking comment. —Deborah Belgum
