Joint Ventures and Investments

9 Months Ended

Sep. 30, 2019

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

Joint Ventures and Investments

4. Joint Ventures and Investments

Joint Ventures

As of September 30, 2019, the following joint ventures are consolidated with the Company:

Entity Name	Date of Original Formation/ Investment	Iconix's Ownership % as of September 30, 2019	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%	Photosynthesis Holdings Co. Ltd.		—
Danskin China Limited	October 2016	100%	Li-Ning (China) Sports Goods Co. Ltd.		—
Umbro China Limited	July 2016	100%(4)	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)(3)	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, 2018 for material terms of the put and call options associated with certain of the Company’s joint ventures.

⁽³⁾ In March 2019, the Company entered into an amendment to the Iconix Europe LLC Operating Agreement to extend the put/call options from the six month period commencing January 13, 2019 (as stipulated in the agreement) to a period commencing January 13, 2019 and ending on September 30, 2019.  In September 2019, the Company entered into amendment to the Iconix Europe LLC Operating Agreement to extend the put/call options to a period ending on December 31, 2019.

⁽⁴⁾ 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.

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)(3)	October 2013	Global Brands Group Asia Limited	Put / Call Options
MG Icon (1)	March 2010	Purim LLC		—

⁽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, that the joint venture is not a VIE and not subject to consolidation.  The Company records its investment under the equity method of accounting. 

⁽²⁾ Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for material terms of the put and call options associated with the Company’s joint venture.

⁽³⁾ In March 2019, the Company entered into an amendment to the Iconix SE Asia, Ltd. Operating Agreement to extend the put/call options from the six month period commencing October 1, 2018 (as stipulated in the agreement) to a period commencing October 1, 2018 and ending on September 30, 2019.  In September 2019, the Company entered into an amendment to the Iconix SE Asia, Ltd. Operating Agreement to extend the put/call options to a period   ending on December 31, 2019.

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	September 30, 2019		December 31, 2018
Candie’s	Candies Shanghai Fashion Co. Ltd.	20%	$	10,188	$	10,529
Marc Ecko	Shanghai MuXiang Apparel & Accessory Co. Limited	15%		2,270		2,270
Material Girl	Ningbo Material Girl Fashion Co. Ltd.(1)	20%		—		2,129
Ecko Unltd	Ai Xi Enterprise (Shanghai) Co. Limited	20%		10,245		10,400
			$	22,703	$	25,328

⁽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 for the Current Nine Months.

Other Equity Investments

Entity Name	Date of Original Formation / Investment
China Outfitters Holdings Ltd. (2)	September 2008
Marcy Media Holdings, LLC (1)	July 2013

⁽¹⁾ In accordance with ASC 825, given that this investment does not have a readily determinable fair value and the Company does not have significant influence over the entity, the Company assesses this investment for potential impairment on a quarterly basis. The Company recorded an impairment charge during the Current Quarter in the amount of $17.0 million based on the estimated value that would be realized on the disposition of the Company’s equity interest in Marcy Media Holdings, LLC in connection with the Roc Parties Settlement (See Note 11). 

⁽²⁾ As part of the 2015 purchase of our joint venture partners’ interest in Iconix China, the Company acquired an equity investment in China Outfitters Holdings Ltd.  As of September 30, 2019 and December 31, 2018, the fair value of this investment was approximately $0.9 million and $1.1 million, respectively, with the decrease in fair value of approximately $0.2 million recorded within Other Income on the Company’s condensed consolidated statement of operations.