New York–Iconix Brand Group, marketer of brands such as Candie’s, Danskin, Joe Boxer, etc., saw its shares plunge today upon news that the Securities and Exchange Commission (SEC) has opened an investigation into Iconix’ accounting.
The SEC has sent Iconix a formal order of investigation following a comment letter process with the SEC related to Iconix’ annual report for the year that ended December 2014 and accounting treatment for the formation of international joint ventures.
Iconix said it plans to “fully cooperate” with the SEC. But the news took its toll on Iconix stock which plunged more than 26% in early trading to $5.49 a share.
In November Iconix’ management restated its historical financial statements for the 2013 fiscal year and fourth quarter, the 2014 fiscal year and each of its quarters, and the first and second quarters of 2015 “to correct certain errors in accounting.”
The company’s board of directors also formed a special committee, consisting of independent directors, to review the issue.
“Iconix will continue to focus on building its brand management platform across the globe and is committed to driving the long term success of the Company,” Iconix stated today. “The Company is currently in active discussions with potential lenders and continues to expect to be in a position to refinance its 2016 convertible notes.”
Iconix is a brand management company that licenses brands to retailers and manufacturers primarily in the apparel, accessories, footwear, and apparel including brands available in such stores as Kohl’s, Kmart, Sears, Macy’s, Target and JCPenney.