Following its announcement of the sale of Umbro China, Iconix China Limited, New York-based brand management company Iconix Brand Group, Inc.’s Chinese subsidiary, revealed on Thursday that it has also signed a deal to sell the Starter China business.
According to an SEC filing made by the company, Iconix China has entered into a share purchase agreement to sell all equity interests of the Starter China Limited to an unnamed buyer for consideration of $16.0 million.
The deal will include the sale of the Starter sportswear brand on mainland China, Hong Kong, Taiwan and Macau, and is expected to close by September 15, 2020, subject to the satisfaction or waiver of customary closing conditions.
Iconix said that it intends to use the funds obtained from the sale for debt repayment and general corporate expenses.
News of the deal comes after Iconix’s announcement of the sale of Umbro China in April of this year, a matter of months after the company’s CEO, Robert Galvin, suggested in a November earnings call that the group had been working with the “wrong partner” for the sportswear brand on the Chinese market.
The Umbro China sale will see the brand’s Chinese operations go to HK Qiaodan for $62.5 million and is also expected to close by September 15.
Similarly to a number of fashion-focused companies, Iconix’s operations have been heavily impacted by the Covid-19 pandemic. The group, whose owned brand portfolio also includes Lee Cooper and Ecko Unltd., reported a net loss of $21.5 million, or $1.86 per diluted share, for the first quarter ended March 31, 2020.
The company’s revenue for the period was $28.0 million, representing a 22% year-over-year decline.