Denmark-based clothing brand IC Group has entered an agreement with to sell its Saint Tropez fashion brand to DK Company.
Established in 1986, Saint Tropez offers a range of fashion products for girls and women. The company became part of IC Group in 2002.
IC Group expects that the transaction will have a positive, minor million amount impact on cash-flow.
However, the accounting effect is expected to amount to a loss of kr70m ($10.7m). The majority of this is from the impairment of goodwill, other intangible and tangible assets, as well as deferred tax assets.
Of the total amount, kr55m ($8.4m) will be recognised in H1 2018/19, while kr15m ($2.29m) come in the third quarter of 2018-19.
The group will classify and present Saint Tropez as under discontinued operations during the interim report for Q3 2018/19.
IC Group expects to close the transaction on 31 January this year.
Established in 2001, IC Group was formed as a result of a merger between Carli Gry International and InWear Group. The company currently operates various premium brands such as Tiger of Sweden and By Malene Birger.
As part of the transaction, the group’s continuing operations, including Tiger of Sweden, By Malene Birger and its ‘Central functions’ are expected to offer a minor reduction in revenue for the financial year 2018-19.
For the Tiger of Sweden brand, the company expects a minor revenue reduction, as well as a moderate decline in nominal earnings. Its other brand, By Malene Birger, is expected to report a moderate revenue reduction, as well as a substantial decline in nominal earnings.