IPATH has been sold to Klone Lab, a Massachussetts-based licensing house for New Balance sandals, from parent company Timberland—an announcement Timberland allegedly made in a memo sent out to its employees, according to a report on SportsOneSource.com.
In the second quarter of 2010, Timberland took a charge because IPATH had not met the revenue and earnings growth forecasted when it was acquired in August 2007.
A report on shop-eat-surf.com said that CEO Jeff Swartz wrote in a memo last week that IPATH’s revenues grew 40% in the past year with increases in its account base domestically and internationally. However, Timberland decided IPATH did not fit with Timberland’s core mission to become the No. 1 outdoor company.
In the second quarter ended July 2, 2010, Timberland recorded an impairment charge of $5.4 million after concluding that the carrying value of goodwill exceeded the estimated fair value for its IPath, North America Retail and Europe Retail reporting units. It also recorded a separate impairment charge of $7.8 million after concluding that the carrying value of the IPath and howies trademarks and other intangible assets exceeded their estimated fair value.
After the charges, Timberland said there was $720 of finite-lived trademark intangible assets remaining at July 2, 2010. The carrying value of Ipath’s goodwill was reduced to zero.
Timberland paid $12.6 million for IPATH in 2007, according to its financial filings.
Klone Lab, based in Amesbury, MA, is the licensing house for New Balance Inc. sandals, slides and open toe products. Last April, it became the sandals and slides for Warrior Sports, also owned by New Balance.
Klone Lab’s management includes CEO, Tom McGee, former VP men’s footwear at Timberland. Brett Ritter, former VP of Product for Reef Sandals, serves as head of design. Also on the team are Matt Palma as president and Stan Rosenzweig as a managing partner who leads the operations and logistics team.