Buxbaum Group’s role as turnaround investor in Rampage, the Los Angeles-based manufacturer and distributor of junior apparel—a role which included directing a major overhaul of the business over the past two years—recently culminated in the $45.9-million sale of the company to Iconix Brand Group.

Iconix is a publicly traded, New York-based company whose strategy is to invest in intellectual property and add value to it over time. The firm’s acquisition of Rampage’s brand and licensing agreements complements prior buys of such strong names as Joe Boxer, Candie’s and Bongo.

As previously reported (Strategy One, 2nd Quarter 2005), two years ago, Rampage was confronted with the possibility of having to file for Chapter 11 for the second time in six years. The company found itself in this position despite the fact that its product line was as strong as ever.

“Our team identified Rampage’s key problem as an inability to deliver goods on time and manage its inventory,” explains Paul Buxbaum, Chairman and CEO of Buxbaum Group. “The chronic delivery problems triggered cancellations and chargebacks from Rampage’s retail customers, thus creating a major drain on the company’s bottom line.”

In response, Buxbaum Group simplified the acquisition process, contracting with overseas suppliers to deliver finished goods on time and according to specs. It also moved to revamp Rampage’s back office operation, cutting down on speculative inventory. The impact of these changes on Rampage’s bottom line was striking. Even with sales volume deliberately pared down, annual gross profits increased by $3 million.

Another critical element of the turnaround and eventual sale of the company was Buxbaum Group’s strategy that allowed Rampage to regain full control of its trademark and licensing revenue. To facilitate this, the firm put together a plan to purchase the creditors’ trust established at the time of Rampage’s bankruptcy. By virtue of a lien on Rampage’s valuable trademark, the trust had been receiving half of the licensing revenues. The buy out of the creditor’s trust enabled Rampage to again benefit from the full stream of licensing revenues and, concurrently, open the door to aggressive efforts to recruit new licensees.

“We took a troubled company and put it back on its feet, giving it needed financial and operational assistance,” sums up Buxbaum Group President David Ellis. “Rampage is now primed to go to the next level.”