Joint Ventures and Investments

6 Months Ended

Jun. 30, 2020

Investments In And Advances To Affiliates Schedule Of Investments [Abstract]

4. Joint Ventures and Investments

Joint Ventures

As of June 30, 2020, the following joint ventures are consolidated with the Company:

Entity Name	Date of Original Formation / Investment	Iconix's Ownership % as of June 30, 2020	Joint Venture Partner	Put / Call Options, as applicable ⁽²⁾
Lee Cooper China Limited	June 2018	100%	POS Lee Cooper HK Co. Ltd.		—
Starter China Limited	March 2018	100% ⁽⁴⁾	Photosynthesis Holdings Co. Ltd.		—
Danskin China Limited	October 2016	90% ⁽⁵⁾	Li-Ning (China) Sports Goods Co. Ltd.		—
Umbro China Limited	July 2016	100% ⁽³⁾	Hong Kong MH Umbro International Co. Ltd.		—
US Pony Holdings, LLC	February 2015	75%	Anthony L&S Athletics, LLC		—
Iconix MENA Ltd. ⁽¹⁾	December 2014	55%	Global Brands Group Asia Limited	Put / Call Options
Iconix Israel, LLC ⁽¹⁾	November 2013	50%	MGS		—
Iconix Europe LLC ⁽¹⁾	December 2009	51%	Global Brands Group Asia Limited	Put / Call Options
Iconix Australia ⁽¹⁾	September 2013	55%	Pac Brands USA, Inc.	Put / Call Options
Diamond Icon ⁽¹⁾	March 2013	51%	Albion Agencies Ltd.		—
Buffalo brand joint venture ⁽¹⁾	February 2013	51%	Buffalo International		—
Icon Modern Amusement, LLC ⁽¹⁾	December 2012	51%	Dirty Bird Productions		—
Hardy Way, LLC	May 2009	85%	Donald Edward Hardy		—

⁽¹⁾

The Company determined, in accordance with ASC 810, based on the corporate structure, voting rights and contributions of the Company and its respective joint venture partner, the entity is a variable interest entity (VIE) and, as the Company has been determined to be the primary beneficiary, is subject to consolidation. The Company has consolidated this joint venture within its consolidated financial statements since inception. The liabilities of the VIE are not material and none of the VIE assets are encumbered by any obligation of the VIE or other entity.

⁽²⁾	Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for material terms of the put/call options associated with certain of the Company’s joint ventures.

⁽³⁾

In July 2019, pursuant to the operating agreement, the Company reacquired the remaining 5% ownership interest in Umbro China from MHMC, its joint venture partner, for approximately $1.3 million. As a result of this transaction, the Company now maintains 100% ownership interest in Umbro China. In April of 2020, the Company announced that it had entered into an agreement to sell its interests in the entity to HK Qiaodan International Limited for approximately $62.5 million. The transaction closed on July 31, 2020.

⁽⁴⁾

In June 2020, the Company, entered into a share purchase agreement to sell all of the equity interests of Starter China Limited, a wholly-owned subsidiary of Iconix China for consideration of $16.0 million. The Starter China Sale includes the sale of the Starter brand in the mainland of China, Hong Kong, Taiwan and Macau. The Starter China Sale is anticipated to close on or prior to September 15, 2020.

⁽⁵⁾	On June 30, 2020, the Company sold a 10% interest in Danskin China Ltd to Li Ning Sports (Hong Kong) Company Ltd for $1.6 million.

Investments

Equity Method Investments

Entity Name	Date of Original Formation / Investment	Partner	Put / Call Options, as applicable⁽²⁾
Iconix India joint venture ⁽¹⁾	June 2012	Reliance Brands Ltd.		—
Iconix SE Asia, Ltd. ⁽¹⁾	October 2013	Global Brands Group Asia Limited	Put / Call Options
MG Icon ⁽¹⁾	March 2010	Purim LLC		—

⁽¹⁾

⁽²⁾	Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for material terms of the put/call options associated with the Company’s joint venture.

Additionally, through its ownership of Iconix China Holdings Limited, the Company has equity interests in the following private companies, which are accounted for as equity method investments:

		Ownership by	Value of Investment as of
Brands Placed	Partner	Iconix China	June 30, 2020		December 31, 2019
Candie’s	Candies Shanghai Fashion Co. Ltd.	20%	$	10,058	$	10,100
Marc Ecko	Shanghai MuXiang Apparel & Accessory Co. Limited	15%		1,421		2,270
Material Girl	Ningbo Material Girl Fashion Co. Ltd.⁽¹⁾	0%		—		—
Ecko Unltd	Ai Xi Enterprise (Shanghai) Co. Limited	20%		9,729		10,216
			$	21,208	$	22,586

⁽¹⁾

In March 2019, the Company sold its 20% interest in Ningbo Material Girl Fashion Co. Ltd. (“Material Girl China”) to Ningbo Peacebird Fashion & Accessories Co. Ltd. for $3.0 million in cash. Pursuant to the agreement, the sale price is further reduced by the initial cash investment of $0.2 million as well as $0.6 million on brand management expenses incurred since the inception of the Material Girl China entity, to total net proceeds of $2.2 million. Additionally, Purim LLC, our MG Icon partner, is entitled to 33.3% of the net proceeds (or approximately $0.7 million) resulting in the Company’s portion of the net proceeds from the transaction to be approximately $1.5 million. As a result of this transaction, the Company recognized a gain of $0.2 million, which has been recorded within Other Income in the Company’s condensed consolidated statement of operations during FY 2019.

Other Equity Investments

In July 2013, the Company purchased a minority interest in Marcy Media Holdings, LLC (“Marcy Media”), resulting in the Company’s indirect ownership of a 5% interest in Roc Nation, LLC for $32 million. In the third quarter of 2019, the Company recorded an impairment charge of $17.0 million on its investment in Marcy Media. During the fourth quarter of 2019, the Company sold its interests in Marcy Media for $15.0 million.