Sharp Gain Profits, a member of the Symphony Holdings Group based in Hong Kong, has bought all the shares in Pony from Global Brand Marketing Inc. and two other smaller shareholders, The Firm Shoes and Itochu International, in a deal reported at around $15-20 million. GBMI, which lost a lot of money on Pony since it acquired a 70 percent stake three years ago, is now financially stronger to reach the next level of growth, marked in particular by a new global footwear licensing deal with 7 for All Mankind, the up-market American brand of jeans, starting with Fall/Winter 2007.
Complementing its successful Diesel footwear license at the high end, 7 for All Mankind footwear is expected to generate sales of $20-25 million in the first year and nearly $300 million after three years. Excluding Pony, whose sales increased to just under $50 million last year from less than $2 million at the time of purchase, GBMI had total sales of $245 million in 2005 (more on this in Shoe Intelligence).
The new owners have appointed Dave Edwards, a Nike veteran with global experience who ran its European business for a while, as president and chief operating officer of Pony. The rest of Pony’s management team will remain intact and operate from its base in Southern California.
For Killick Datta, the other industry veteran who continues to own 100 percent of GBMI, the acquisition of Pony had meant an opportunity to bank on its long tradition in the sporting goods sector, including its stations under the ownership of Adidas and Pentland Group. He invested a lot in product development and marketing to position it as an athletic fashion brand, while retailers wanted it to concentrate on performance sports, where Pony has more formidable competitors. The investments have led Datta to pass up some other major acquisition opportunities, and he is now considering being more active in the fashion sector.
Pony’s new owner, Symphony Holdings, is 25 percent owned by Yue Yuen, and has produced shoes for the Pony brand in recent years. Pony and Symphony were in talks on possible collaboration in the Chinese market for distribution and licensing in combination with Pony’s distributor in the country, Eda Marketing. Now the joint venture is expected to go forward, directed by Sharp Gain.
In 2005 Symphony Holdings’ turnover grew by 28 percent to HK$1.85 billion (€191.8m-$237.8m), while its net earnings rose by 23 percent to HK$289.9 million (€30.1m-$37.3m). Its revenues in Europe increased by 9 percent to HK$357.5 million (€37.1m-$46.0m). They grew in the USA by 41 percent to HK$1.14 billion (€118.2m-$146.6m), and by 54 percent in Asia to HK$145.7 million (€15.1m-$18.7m).
