Iconix to purchase lifestyle apparel brand Rocawear
06 Mar '07
3 min read
Iconix Brand Group Inc announced that it has entered into a definitive agreement to purchase the brand Rocawear. The purchase price will be $204 million in cash with contingent payments of an additional $35 million of Iconix stock based upon the brand surpassing certain pre-determined performance thresholds over the next three to five years.
Rocawear is a leading lifestyle apparel brand sold through better department and specialty stores with annual retail sales of over $700 million. Rocawear co-founder Jay-Z will be in charge of all product development, marketing and licensing for Rocawear. Jay-Z's senior management team in licensing, marketing and product development will also join Iconix.
He will retain his stake in the operating company that manufactures all of the Rocawear men's apparel and his two partners in that business, Alex Bize and Norton Cher, will continue to run that company and enter into a long-term license agreement with Iconix for the core young men's apparel category. Iconix is forecasting that the Rocawear brand will generate approximately $43 million in royalty revenue in its first twelve months under the Iconix umbrella.
As part of the transaction, Iconix will also enter into a separate equal joint venture with Shawn Carter to establish a new brand management and licensing company that will identify brands to be acquired and/or developed across a broad spectrum of consumer product categories using the Iconix model. The first brand will involve Jay-Z and will be an eponymous luxury brand called "Shawn Carter Collection" which will debut in 2008.