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Debt forces designer to give up control to Iconix
By JAMES COVERT
Last Updated: 2:28 AM, October 28, 2009
Posted: 1:13 AM, October 28, 2009
After years of lavish spending that took him to the brink of bankruptcy, Marc Ecko has been forced to give up control of his own trademark.
Confirming a Sept. 22 report in The Post, the hip-hop clothing kingpin yesterday signed over a 51 percent interest in the Marc Ecko brand to Iconix, a New York company that owns a slew of fashion brands including Joe Boxer, Candie's, Rocawear and London Fog.
Scrambling to avoid yesterday's defeat and keep creditors at bay, Ecko this year had laid off workers and auctioned off his watch trademarks and Avirex brand.
Sources said Ecko is still struggling to lease out pieces of his luxurious 280,000- square-foot headquarters in Midtown, which houses everything from a recording studio to a basketball court.
Still, in an exclusive interview with The Post, the debt-ridden designer took it all in stride.
"I've had a crazy, wild ride. I've done a lot of things that have been naive," Ecko told The Post. "I'll take my lumps for a lot of things that, in retrospect, were a little indulgent. Life happens. I don't regret any of it."
Ecko likewise noted that, with creditors breathing down his neck for the past year, losing the title to his brand name yesterday wasn't such a big change.
"I've lived through a leveraged position," Ecko said. "I don't know whether, once you grow up your business like that, you have full control anymore anyway."
Under the terms of his deal with Iconix, Ecko is surrendering majority control of his trademark in exchange for $63.5 million in cash plus $90 million in financing for a newly formed joint venture.
Iconix, which will keep Ecko as chief creative officer for the joint venture, projects between $42 million and $44 million in yearly royalties.
While critics say the urban styles that fueled Ecko's growth have fallen out of fashion, Ecko said his designs are still evolving.
"Reports of my demise have been reported often and early," he said.
"Kids are not wearing big, baggy things with logos on them -- it just looks different now," added Iconix CEO Neil Cole, noting that Rocawear's sales are up recently. "I promise you these kids are not naked out there and they're not wearing my father's clothes."
Still, Marc Ecko's sales at Macy's, the brand's most important wholesale account, dropped by $18 million last year -- more than 10 percent. No improvement at Macy's is expected this year, Marc Ecko's longtime business partner, Seth Gerszberg, admitted.
On the bright side, comparable sales at Marc Ecko's overgrown retail chain are now up 7 percent from last year's steep declines that had fueled big losses. Helped by even deeper cost cuts this year, the brand expects to swing back to profitability.
Elsewhere, Gerszberg and Ecko bristled at reports that they've been squabbling through their recent business woes.
Asked if they planned to keep the basketball court at their offices despite the cost cuts, Gerzberg said he was trying.
"What do you care?" Ecko chimed in. "You gonna come down and shoot? You got game?"
[email protected]
__
Debt forces designer to give up control to Iconix
By JAMES COVERT
Last Updated: 2:28 AM, October 28, 2009
Posted: 1:13 AM, October 28, 2009
After years of lavish spending that took him to the brink of bankruptcy, Marc Ecko has been forced to give up control of his own trademark.
Confirming a Sept. 22 report in The Post, the hip-hop clothing kingpin yesterday signed over a 51 percent interest in the Marc Ecko brand to Iconix, a New York company that owns a slew of fashion brands including Joe Boxer, Candie's, Rocawear and London Fog.
Scrambling to avoid yesterday's defeat and keep creditors at bay, Ecko this year had laid off workers and auctioned off his watch trademarks and Avirex brand.
Sources said Ecko is still struggling to lease out pieces of his luxurious 280,000- square-foot headquarters in Midtown, which houses everything from a recording studio to a basketball court.
Still, in an exclusive interview with The Post, the debt-ridden designer took it all in stride.
"I've had a crazy, wild ride. I've done a lot of things that have been naive," Ecko told The Post. "I'll take my lumps for a lot of things that, in retrospect, were a little indulgent. Life happens. I don't regret any of it."
Ecko likewise noted that, with creditors breathing down his neck for the past year, losing the title to his brand name yesterday wasn't such a big change.
"I've lived through a leveraged position," Ecko said. "I don't know whether, once you grow up your business like that, you have full control anymore anyway."
Under the terms of his deal with Iconix, Ecko is surrendering majority control of his trademark in exchange for $63.5 million in cash plus $90 million in financing for a newly formed joint venture.
Iconix, which will keep Ecko as chief creative officer for the joint venture, projects between $42 million and $44 million in yearly royalties.
While critics say the urban styles that fueled Ecko's growth have fallen out of fashion, Ecko said his designs are still evolving.
"Reports of my demise have been reported often and early," he said.
"Kids are not wearing big, baggy things with logos on them -- it just looks different now," added Iconix CEO Neil Cole, noting that Rocawear's sales are up recently. "I promise you these kids are not naked out there and they're not wearing my father's clothes."
Still, Marc Ecko's sales at Macy's, the brand's most important wholesale account, dropped by $18 million last year -- more than 10 percent. No improvement at Macy's is expected this year, Marc Ecko's longtime business partner, Seth Gerszberg, admitted.
On the bright side, comparable sales at Marc Ecko's overgrown retail chain are now up 7 percent from last year's steep declines that had fueled big losses. Helped by even deeper cost cuts this year, the brand expects to swing back to profitability.
Elsewhere, Gerszberg and Ecko bristled at reports that they've been squabbling through their recent business woes.
Asked if they planned to keep the basketball court at their offices despite the cost cuts, Gerzberg said he was trying.
"What do you care?" Ecko chimed in. "You gonna come down and shoot? You got game?"
[email protected]
