Sequential Brands to explore strategic alternatives; announces leadership transition
today Oct 7, 2019
New York-based brand management company Sequential Brands Group, Inc. announced on Monday that it is reviewing a range of strategic alternatives for the future of its business, after receiving unsolicited interest in a number of its brands from multiple parties.
Options under consideration include the divesture of one or more of the company’s existing brands, the acquisition of one or more new brands, a stock buyback program and a range of other unspecified initiatives.
The board has contracted brokerage and investment banking firm Stifel in order to assist it in its review. No timetable has been set for the completion of this process and the company also stated that it would not provide any further details on the review’s progress until such a disclosure is deemed necessary or appropriate.
The announcement comes as Sequential has continued to push forward with a transformation plan, the first phase of which entailed its sale of the Martha Stewart and Emeril Lagasse brands earlier this year. The second phase – now underway – involves right-sizing the company’s operational cost structure.
The strategic review won’t be the only thing on the Sequential board’s “to do” list over the next few months, though. On Monday, the company also announced that, following current CEO Karen Murray’s decision to step down from her role, Sequential’s directors have begun a search for a new executive to fill the position.
To support the company during this transition period, its EVP of strategic development and operations, Chad Wagenheim, has been promoted to the role of president.
“I’m looking forward to serving as president and assisting Sequential during this transformative time,” he commented in a release. “We have a strong portfolio of brands, blue chip base of licensees, and solid lender relationships. With our recently restructured lending agreement and no upcoming debt maturities, we are fully focused on executing against our plan to drive growth and right-size our expense structure given the current size of the company.”
Murray, who is stepping down from her position as CEO after just over two years in the role, will continue to serve as senior advisor at the company.
Sequential Brands, which has a portfolio including Jessica Simpson, Gaiam and recently relaunched Caribbean Joe, reported revenues of $26.4 million in the second quarter ended June 30, 2019, down from $33.1 million in the prior-year period.
The company swung into loss in the quarter, posting a net loss from continuing operations of $3.3 million, compared to a net income of $2.2 million in Q2 2018.
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