Iconix International will soon be back in complete control of its brand portfolio.
On Monday, the company finalized an expansion of its existing credit facility with affiliates of Apollo and will use the proceeds to pay off its securitization financing facility, which has been outstanding since 2012. Iconix expects to complete the transaction by January.
Bob Galvin, chief executive officer of Iconix, explained that since 2012, the group’s securitization financing facility was secured by the intellectual property and licensing royalties in North America for many of the company’s brands including Ed Hardy, Starter, Danskin, Ocean Pacific, London Fog, Mossimo, Zoo York, Rocawear and its collection of home labels.
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That deal wasn’t due to expire until 2043, but rather than wait another 17 years, “we’ve been working diligently, particularly since we went private, to see what we could do to repurchase and retire the notes,” Galvin said. “It was a long, arduous process. We were buying them at times in the open market and at times we had tendered for them but we were finally able to negotiate with the noteholders [for] approximately $400 million in face value that we were able to get at a deep discount.”
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This deal means that the entirety of Iconix’s brand portfolio and royalty revenue will once again be fully controlled by the company, which is valued at $6 billion in global retail sales. It also means Iconix is free to pursue strategic alternatives involving the North American rights of all of its brands, including targeted investments and partnerships that were barred under the terms of its former financing facility.
“We have always believed that it is extremely important to reunite the North American brand rights under a cohesive operating structure in the U.S., which is obviously an incredibly influential market for our brands globally,” Galvin said. “For the first time in nearly a decade, and since we took over the business with our partners at Lancer Capital, we will have the opportunity to fully exploit all of our brand rights in the most optimal way.”
He said because of the terms of the former financing, Iconix was not free to do partnerships, collaborations or other deals and only received a small percentage of the full royalty payments from its brands because the majority of those funds went to pay the noteholders. “This is probably the last of the big initiatives from going private that was still out there and we’re thrilled to have been able to accomplish this,” he said.
Since Galvin stepped in as CEO in late 2018 after spending nearly three decades at Cherokee, Elie Tahari, Camuto Group and others, Iconix has turned around its business by going private in 2021, deleveraging its balance sheet and acquiring high-growth brands such as Hoodrich in 2023 and Salt Life in 2024, all of which were achieved in partnership with Apollo.
“Apollo has been an exceptional partner for Iconix, allowing us to complete an incredible turnaround and build a stable foundation for future growth, including by diligently pursuing accretive M&A opportunities,” said Kyle Harmon, president and chief operating officer of Iconix.
“This expanded commitment to Iconix reflects the strong performance of the business and its brands. We’ve worked closely with the management team for several years and are pleased to support this transaction, helping to position Iconix to fully leverage its unified global brand platform,” added Kurt Hoffman, managing director of Apollo.