Kenneth Cole Productions, Iconix Said to Be in Talks
Designer Kenneth Cole is in talks to sell the shoe and clothing company he founded to Iconix Brand Group Inc., the licensing company run by his brother Neil Cole, according to two people with knowledge of the matter.
The timing for a takeover of Kenneth Cole Productions Inc. isn’t clear, and the companies may not reach an agreement, said the people, who declined to be identified because the discussions are private.
Iconix owns brands such as Candie’s and London Fog, and licenses them to retailers and manufacturers. In addition to owning the Kenneth Cole brand, Kenneth Cole Productions operates 110 stores, based on its last annual report.
“Iconix has a long-standing history of purchasing well- known consumer brands and making them stronger than they were prior to their purchase,” said Steven Marotta, an analyst at CL King & Associates in Albany, New York. “It’s no secret that Kenneth Cole has been under-earning in recent years.”
Kenneth Cole Productions, based in New York, has posted back-to-back annual losses as U.S. consumers curbed spending. In May, Chairman Kenneth Cole said he would explore “all strategic avenues” that boost shareholder value. The stock had lost about half its value in the five years through Sept. 16.
Kenneth Cole Productions climbed $2.13, or 15 percent, to $16.59 yesterday in New York Stock Exchange composite trading, the most since January 2009. Iconix climbed 7 cents to $17.04 on the Nasdaq Stock Market.
Iconix Chairman and Chief Executive Officer Neil Cole declined to comment to Bloomberg at a Sept. 15 conference in New York. A Kenneth Cole spokesman couldn’t immediately comment.
Iconix, which has posted five straight quarters of sales growth, has expanded beyond apparel brands, buying the rights to the “Peanuts” comic strip characters with the cartoonist’s family in April. Iconix also was in talks last year to buy Playboy Enterprises Inc., publisher of the eponymous magazine, though those discussions collapsed in December, two people familiar with the matter said then.
Kenneth Cole Productions got started in a footwear-laden trailer in midtown Manhattan two decades ago, according to the company’s website. The shoe designer obtained parking for his mobile shoe store by applying for a movie permit to shoot a film called “The Birth of a Shoe Company,” finding a director and using models as actresses.
The maneuver scored him parking on Sixth Avenue, allowing him to sell 40,000 pairs of shoes in 2 1/2 days. Kenneth Cole Productions’s sales topped $400 million last year.
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