Brown Shoe Company, Inc. said it has sold Avia and Nevados to Galaxy Brand Holdings, Inc. The transaction, expected to close immediately, was for $74 million. 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. “We see significant opportunity — in both domestic and international markets — to drive the growth and continued development of these brands.” Esses was formerly president of E.S. Originals.
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.
