Kenneth Cole Productions (NYSE: KCP) recently announced that it has acquired the Le Tigre brand for $13 million, plus an earn-out that could escalate the value of the deal to as much as $25 million.
Kenneth Cole will gain all intellectual property related to the company. CEO Kenneth Cole said that "We are pleased to add such a strong and internationally respected brand to our portfolio. We believe there is significant upside for the Company, specifically through various licensing opportunities as well as through the introduction of men's, women's and children's footwear."
I agree with him, and the price certainly looks right. Le Tigre was founded in 1977, and was big for awhile, before going out of production in the 1990s. Re-launched in 2003, Le Tigre has made a quick impact. Its products are sold in stores like Nordstrom and Lord & Taylor and, given the brand's status as a household name, there are likely to be numerous licensing opportunities.
I would say that a lot of lesser brands are receiving much higher valuations, and expect that, under the umbrella of a larger company like Kenneth Cole, Le Tigre will shine.
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