ABG To Acquire Nautica

Authentic Brands Group (ABG) agreed to acquire the Nautica brand from VF Corp., potentially adding $1.5 billion in annual retail sales toward its goal of having $10 billion by 2020, ABG said. ABG will get access to more than 40 Nautica licensees stretching across men’s sportswear and outerwear, women’s and children’s sportswear and accessories, fragrances and home goods. Details of the sale, which is expected to close within 30 days, haven’t been released. Nautica, founded by clothing designer David Chu in 1983, was sold the following year to the apparel company State-O-Maine, which changed its name to Nautica in 1994. VF bought Nautica in 2003.

Nautica was part of VF’s sportswear business, which posted a 13% decline in revenue to $536 million in the fiscal year ended Dec. 31, 2016 due to a “challenging” market in department stores, VF said. VF also switched Nautica to licenses for women’s sleepwear and men’s underwear in 2016. That change accounted for 5% of the revenue decline in sportswear as the company transitioned to a new business strategy for the categories, VF said. At the end of 2016, VF 70 licensed Nautica stores in the U.S. and another 290 in international markets. VF has been restructuring its brand lineup; it sold Majestic to Fanatics last year.

Contact:

Authentic Brands Group, Jamie Salter, CEO, 212-760-2412, jsalter@abg-nyc.com

Jakks Pacific’s Sales to Toys R Us Plunge

Jakks Pacific sales to Toys R Us (TRU) plunged 23.2% to $69.5 million in the year ended Dec. 31, accounting for 11.2% of its total revenue, down from 12.8% a year earlier, the company said in a 10K filed with the SEC. The sales to TRU declined as the chain filed for bankruptcy protection and is the process of liquidating. As a result, Jakks filed a $13.9 million claim with its insurance carrier and had a $22 million net receivable with Toys R Us. It had already reserved $8.9 million following the initial bankruptcy filing, leaving it with a $13.1 million net exposure to Toys R Us.

For the year, net sales to Walmart fell 16.2% to $156.4 million, 25.5% of Jakks total of $613.1 million. Net sales to Target declined 1.3% to $108.7 million. Sales in the U.S. and Canada fell 15% to $406.1 million, while those in international markets dropped 18.2% to $107.2 million. Halloween-related revenue rose 2.7% to $99.4 million. Jakks didn’t record any pet products-related revenue, having dissolved the business last May, says a spokeswoman.

Meanwhile, the company’s future aggregate minimum guarantees were $57.1 million as of Dec. 31, of which $40.7 million is due within the next 12 months, Jakks said.

Contacts:

Jakks Pacific, Joel Bennett, Chief Financial Officer, 310-315-2638, jbennett@jakks.net

EA Revamps Battlefront Game

Electronic Arts (EA) Friday unveiled a revamped version of its “Star Wars Battlefront 2” game, eliminating the in-game purchase option for so-called loot boxes that raised the ire of gamers last November. The anger centered on a system that allowed gamers to save time by paying extra to improve their abilities and to accelerate the unlocking major characters like Darth Vader. Amid the backlash from gamers, EA temporarily turned off in-game purchases a day before the game’s release on Nov. 17. “Since release, we’ve been hard at work making changes based on your feedback to create a better game for all our players,” EA wrote in a post. EA said in January that it sold seven million units of the game in Q4 ending in December.

Contact:

Electronic Arts, Blake Jorgensen, Chief Financial Officer, 650-628-1393

Perry Ellis International’s Q4 Royalty Revenue Increases

Perry Ellis International’s royalty revenue rose 12% to $9.6 million in Q4 ended Feb. 3 amid strong sales of Ben Hogan DTR apparel at Walmart as well as the Original Penguin and Perry Ellis brands.

Q4 net income jumped to $39.6 million from $8.9 million a year earlier as it recorded a $30 million benefit from the new federal tax law. Revenue rose 11.3% to $227 million. The improved sales included a 20% gain in golf-related sales, with revenue from Callaway-licensed apparel increasing by a double-digit percent as Perry Ellis landed an “authentic tour” collection at several prominent golf courses, including St. Andrews in Scotland and Whistling Straits in Wisconsin, company executives said.

The company also posted a double-digit percentage increase in Q4 sales of the PGA Tour line, while Jack Nicklaus-licensed apparel expanded distribution via an in-store “Golden Bear” display at Golf Town stores in Canada. With the Callaway brand, Perry Ellis implemented a new minimum advertised pricing policy as it sought to tighten distribution of the brand, CEO Oscar Feldenkreis said.

The company’s Nike swimwear also posted strong Q4 sales in advance of a planned launch in Asia, starting with a major department store retailer in South Korea, company executives said. Meanwhile, menswear sales increased 14.6% to $166 million, while those from women’s apparel rose 13.6% to $25 million. Sales through the 55 Perry Ellis and Original Penguin stores were flat with a year ago at $27 million.

Contact:

Perry Ellis International, Alberto Maduro, SVP Licensing, 305-873-1331, alberto.maduro@pery.com