Iconix Negotiates for Kenneth Cole - Analyst Blog

Iconix Brand Group (ICON) is negotiating an agreement to acquire shoe and clothing company Kenneth Cole Productions Inc. (KCP), as reported by Bloomberg. The timing of the deal and other related details are not revealed. Moreover, one is not sure whether the deal will finally materialize or not.

 

Once a shoemaker, Iconix Brand Group has stepped up into becoming a licensing and brand management company. Its company-owned consumer and home brands are licensed to third parties that make and sell apparel, footwear, and a variety of other fashion and home products. The company with an aim of diversifying its portfolio of brands recently acquired all the assets related to the Peanuts comic strip and formed a new company, Peanuts Worldwide.

 

Kenneth Cole Productions commenced operations as a footwear-laden trailer in midtown Manhattan two decades ago. The permit for the mobile shoe store was obtained by submitting an application to shoot a movie entitled The Birth of a Shoe Company.  

 

With free cash flows of $44.3 million and no dividends to pay, Iconix Brand can indulge in tag-on acquisitions, thereby complementing its portfolio of brands and extending its footprint geographically.

 

Iconix posted a total revenue growth of 35.0% reaching $76.0 million in the second quarter of 2010 versus $56.4 million reported in the year-ago quarter. The company earned 36 cents a share in the quarter, compared with 33 cents in the year-ago quarter. Iconix guides total revenues for fiscal 2010 in the range of $305–$315 million and earnings per share between $1.35 and $1.40.