Iconix buys 51 pct stake in Buffalo David Bitton
NEW YORK (AP) — Clothing licensing company Iconix said Monday that it acquired a 51 percent interest in the Buffalo David Bitton brand from Buffalo International ULC for about $76.5 million in cash.
Iconix, whose stable of brands includes Candie's Joe Boxer and Badgley Mischka, also lifted its 2013 profit and revenue guidance.
In order to acquire the Buffalo trademark, Iconix formed a joint venture company with Buffalo International ULC. Iconix said it will control the joint venture and Buffalo International will be the main licensee.
The Buffalo brand, which is owned by David Bitton and his brothers, was founded in 1985 and includes denim, sportswear, activewear and accessories. It's primarily sold through department stores and has 30 stand-alone retail stores, mainly in Canada, operated by the core licensee.
Iconix said it expects the Buffalo brand to generate about $25 million in royalty revenue on an annualized basis.
In light of the acquisition and an increase in the company's stock buybacks, Iconix said it now expects to post an adjusted 2013 profit of $2 to $2.10 per share, up from its previous estimate of $1.85 to $1.95 per share. Analysts polled by FactSet expect $1.92 per share, on average.
The company also boosted its revenue prediction to a range of $415 million to $425 million from its previous $395 million to $405 million. Analysts expect $397.7 million.
Shares of New York-based Iconix Brand Group Inc. fell 38 cents to $23.81 in midday trading.