Rapper Jay-Z Sells Clothing Company Rocawear For $204 Million In Cash
The deal, which was announced today, (Mar. 6) could also net Jay-Z $35 million in Iconix stock, if the Rocawear brand meets certain performance requirements over the next three-five years.
"Iconix is pioneering a new brand management model and by combining Rocawear with their platform, my team and I can focus on our strengths in design and lifestyle
marketing." Jay-Z said. "I'm also looking forward to working with Neil Cole and the Iconix organization on other brand development opportunities."
Jay-Z will continue to be in charge of all product development, marketing and licensing for Rocawear, which boasts annual retail sales of over $700 million.
The rapper will retain his stake in the operating company the manufactures all of the Rocawear men's apparel line, and the mogul's two partners, Alex Bize and Norton Cher, will continue to ran the manufacturing company.
"This is the largest acquisition Iconix has made and Rocawear is a brand that is increasing in market share and has extraordinary potential for growth," said Neil Cole, Chairman and CEO of Iconix Brand Group commented. "The leadership team is already in place to fulfill our mission and we will maintain complete continuity within the business by having Jay and his team in charge of all product development, licensing and marketing. Jay and his partners in the operating company that manufactures all of the Rocawear men's apparel, Alex Bize and Norton Cher, will become our licensee for the core business. Iconix will add talent and resources that I believe will
help make Rocawear a billion dollar global brand. This acquisition will be transformative for Iconix in terms of its scale, the diversification it brings to our portfolio of brands as well as having someone as talented as Jay-Z joining our company and the many synergies that could bring."
Iconix is forecasting that Rocawear, which was founded in 1995, will generate almost $43 million in royalty revenue during the first 12 months of the agreement.
Iconix and Jay-Z have also reached a deal to form a new brand management/licensing company that will debut a new luxury brand titled The Shawn Carter Collection, which is due in stores in 2008.
The deal is expected to close this month.