Iconix Brand Group seeks white knight investor

Iconix Brand Group is considering selling itself or combining it with another company as the firm broadens its search for a financial lifeline.

The brand-licensing company says its board has authorized management and its advisers to study options including a sale, merger, debt and equity financings, or other alternatives to keep the firm afloat.

New York-based Iconix owns, licenses and markets consumer brands across fashion and sports, including Candie’s and Ed Hardy. It’s been shedding certain assets to raise cash, including Starter China, which it agreed to sell for US$16 million in June.

The company retained Ducera Partners as a financial adviser, together with law firm Dechert, its existing legal counsel, to assist in the review efforts. The plans are in addition to the company’s previously announced agreements to sell the rights to the Umbro and Starter brands in China, it said.

Iconix shares soared 58 percent in after-market trading. The company said the Covid-19 pandemic had a “meaningful impact” on its performance and it was cutting costs to preserve liquidity, according to its first-quarter financial report. In March, the firm said there was “substantial doubt” that it could continue to operate and it could be forced to file for bankruptcy or liquidate without a waiver from lenders.

The retail industry has been hit hard by the coronavirus outbreak, which forced store closures nationwide and prompted sharp declines in spending on discretionary goods. J.C. Penney, Neiman Marcus Group and J Crew Group all filed for bankruptcy in May. RTW Retailwinds, the parent company of New York & Co, filed for bankruptcy Monday.