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Iconix Brand Weighs Strategic Options Including Potential Sale

Bloomberg logoBloomberg 7/13/2020 Katherine Doherty
a person posing for the camera: NEW YORK, NY - JUNE 04: General atmosphere during the Ed Hardy Spring/Summer 2019 collection celebration at Good Luck Dry Cleaners on June 4, 2019 in New York City. (Photo by Lars Niki/Getty Images for Ed Hardy / Good Luck Dry Cleaners) © Photographer: Lars Niki/Getty Images North America NEW YORK, NY - JUNE 04: General atmosphere during the Ed Hardy Spring/Summer 2019 collection celebration at Good Luck Dry Cleaners on June 4, 2019 in New York City. (Photo by Lars Niki/Getty Images for Ed Hardy / Good Luck Dry Cleaners)

(Bloomberg) -- Iconix Brand Group Inc. is considering selling itself or combining with another company as the firm broadens its search for a financial lifeline.

The brand-licensing company said in a news release Monday that its board 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 Ltd., which it agreed to sell for $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% 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 Co., Neiman Marcus Group Inc. and J. Crew Group Inc. all filed for bankruptcy in May. RTW Retailwinds Inc., the parent company of New York & Co., filed for bankruptcy Monday.

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