HARSH ECKO ECHO
Streetwear rumble
A new brawl has broken out over the crumbling Marc Ecko streetwear empire.
An explosive lawsuit alleges that majority owner Iconix and its former chief executive sabotaged the brand — hurting its licensing partners in the process — as part of a twisted plot to wrest full control of the business from its cofounder.
Former Iconix CEO Neil Cole “deliberately failed to market, promote, protect and preserve” the Ecko brand in a successful bid to bankrupt Seth Gerszberg, the former business partner of founder Marc Ecko and the brand’s biggest licensee, according to the suit.
Creative differences between the two men “set Cole on a mission to bring Gerszberg (and his companies) to financial ruin and, ultimately, bankruptcy,” the suit alleges.
The purported sabotage was laid out in a complaint filed by Marcraft Apparel Group, which in 2010 signed a fouryear licensing deal with Iconix to make and sell sport coats, blazers and trousers under the Ecko name.
The suit casts a harsh light on Iconix and its former CEO. The company, which owns a slew of brands including Joe Boxer, Candie’s and Rocawear, is already feeling the heat from analysts who are questioning its rapid growth. Cole stepped down in August under a cloud of accounting irregularities.
New Yorkbased Marcraft claims Cole “purposefully degraded” the brand in his dispute with Gerszberg over the direction of Ecko — but hid the damage from other licensing partners so they would reup their deals and keep paying royalties.
Iconix earlier sued Marcraft for failing to make $5 million in “guaranteed” payments, prompting Marcraft to hit back with a countersuit in New York state court. Neither Marcraft nor Iconix would comment.
Cole refused to work with Gerszberg on a longterm marketing plan, strangling the business to the point that Gerszberg’s Marc Ecko Enterprises filed for bankruptcy last year, the suit alleges.
Marcraft, which also makes suits under the Donald Trump name, said it never would have renewed its deal with Iconix in 2013 had it known of Cole’s antiGerszberg campaign. The suit claims it was part of a “pattern of deceit” that led to Cole’s departure.
Ecko licensee Me & You Accessories that makes handbags also has sued Iconix, accusing it of mismanaging the brand.
Iconix’s menswear licensing revenue for the quarter ended June fell nine percent from the yearearlier period, due partly to weakness in the Ecko brand.
Founder Marc Ecko presided over the once hot hiphop brand — known for its rhino logo — before overspending forced him to sell out to Iconix in 2009. Gerszberg, who couldn’t be reached for comment, eventually sold his stake to Iconix but continued to license the name.