ST. LOUIS--(BUSINESS WIRE)--Brown Shoe Company, Inc. (NYSE: BWS) (brownshoe.com)
today announced it has sold Avia and Nevados for $74 million, with the
transaction closing immediately. Galaxy Brand Holdings, Inc. acquired
the Avia and Nevados brands, while Brown Shoe Company is retaining Ryka,
and other brands, and plans to use the proceeds from the sale to pay
down debt.
Brown Shoe Company acquired Avia and Nevados as part of its American
Sporting Goods (ASG) acquisition completed in February 2011 for $145
million and assumed debt. In October of 2011, the company sold the AND 1
brand, which was also part of the ASG acquisition, for $55 million.
“Although we were not actively marketing Avia for sale, it’s a great
brand with a strong heritage that appealed to Galaxy Brand Holdings. As
a result, they made an offer which we believe is in the best interest of
our shareholders to accept,” said Diane Sullivan, president and chief
executive officer of Brown Shoe Company. “We’re excited about continuing
to expand and strengthen the Ryka brand, which is the most integral and
relevant part of the ASG acquisition for Brown Shoe Company.”
“We are excited by the tremendous potential in both Avia and Nevados,
and look forward to building on their foundations in the athletic and
outdoor space,” said Eddie Esses, chief executive officer of Galaxy
Brand Holdings. “Both brands enjoy a loyal consumer base, and we are
committed to continuing a tradition of serving all of our retail
partners with innovative, high-quality products. We see significant
opportunity -- in both domestic and international markets -- to drive
the growth and continued development of these brands.”
The realignment and integration related costs associated with this
transaction are expected to result in a charge of $15 million to $17
million in fiscal 2013, or approximately $0.28 to $0.33 per diluted
share on a GAAP basis. Of this amount, $11 million to $13 million is
expected to be non-cash.
First Quarter Earnings Call Details
Brown Shoe Company will announce its first quarter 2013 financial
results before market open on Wednesday, May 29. Company executives will
host a financial analyst call at 9:00 a.m. ET that day, to discuss first
quarter earnings and to provide a general business update.
The dial-in number for financial analysts in North America is (877)
217-9089 or (706) 679-1723 for international analysts, and the
conference ID is 70291031. To participate, please dial in a few minutes
before the scheduled time. Employees, the media and the public are
invited to listen to the call at investor.brownshoe.com/news/events.
A replay of the call will be available through Wednesday, June 12, 2013,
by dialing (855) 859-2056 in North America (404) 537-3406
internationally and using the conference ID 70291031. A webcast replay
will also be archived for a limited period at investor.brownshoe.com/news/events/archive.
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995
This press release contains certain forward-looking statements and
expectations regarding the company’s future performance and the
performance of its brands. Such statements are subject to various risks
and uncertainties that could cause actual results to differ materially.
These risks include (i) changing consumer demands, which may be
influenced by consumers’ disposable income, which in turn can be
influenced by general economic conditions; (ii) intense competition
within the footwear industry; (iii) rapidly changing fashion trends and
purchasing patterns; (iv) customer concentration and increased
consolidation in the retail industry; (v) political and economic
conditions or other threats to the continued and uninterrupted flow of
inventory from China, where Brown Shoe Company relies heavily on
manufacturing facilities for a significant amount of their inventory;
(vi) the ability to recruit and retain senior management and other key
associates; (vii) the ability to attract, retain and maintain good
relationships with licensors and protect intellectual property rights;
(viii) the ability to secure/exit leases on favorable terms; (ix) the
ability to maintain relationships with current suppliers; (x) compliance
with applicable laws and standards with respect to lead content in paint
and other product safety issues; (xi) the ability to source product at a
pace consistent with increased demand for footwear; and (xii) the impact
of rising prices in a potentially inflationary global environment. The
company’s reports to the Securities and Exchange Commission contain
detailed information relating to such factors, including, without
limitation, the information under the caption Risk Factors in Item 1A of
the company’s Annual Report on Form 10-K for the year ended February 2,
2013, which information is incorporated by reference herein and updated
by the company’s Quarterly Reports on Form 10-Q. The company does not
undertake any obligation or plan to update these forward-looking
statements, even though its situation may change.
About Brown Shoe Company
Brown Shoe Company is a $2.6 billion, global footwear company whose
shoes are worn by people of all ages, from all walks of life. Our
products are available virtually everywhere — in the nearly 1,300 Famous
Footwear and Naturalizer retail stores we operate, in hundreds of major
department and specialty stores, on 14 branded ecommerce sites, and on
many additional third-party retail websites. Through our broad range of
products, we serve three key market segments. Our Family brands — Famous
Footwear, Famous.com, and shoes.com — are one-stop-shopping destinations
for high quality, affordable styles for a family’s every occasion.
Active people who want comfort, style and performance can look to our
Healthy Living brands — Naturalizer, Dr. Scholl’s Shoes, LifeStride and
Ryka. Our Contemporary Fashion brands — Via Spiga, Vera Wang, Vince, Sam
Edelman, Franco Sarto, Carlos Santana and Fergie Footwear — keep
fashionistas in step with the latest trends. At Brown Shoe Company, we
inspire people to feel good and live better... feet first!
About Galaxy Brand Holdings, Inc.
Galaxy Brand Holdings, Inc. is a New York-based brand acquisition and
development firm recently founded by a team of industry veterans. The
company was formed to acquire brands and other intellectual property in
the apparel, footwear and accessory markets, which have broad, global,
consumer appeal.
