Brown Shoe sells Avia and Nevados brands at 74 million

Brown Shoe Co. has announced the sale of its Avia and Nevados brands to Galaxy Brand Holdings Inc. for 74 million dollars. The shoe retailer will however retain Ryka and other brands, and said it plans to use the proceeds from the sale to pay down

debt. “Although we were not actively marketing Avia for sale, it’s a great brand with a strong heritage that appealed to Galaxy Brand Holdings. As a result, they made an offer which we believe is in the best interest of our shareholders to accept,” Diane Sullivan, Brown Shoe president and CEO, said in a statement.

“We’re excited about continuing to expand and strengthen the Ryka brand, which is the most integral and relevant part of the ASG acquisition for Brown Shoe Company.”

Brown officials explained earlier this week that all proceeds will be allocated to sort debts. In the same vein, the company advanced that the deal is closing immediately.

Transaction to affect earnings per share

As a result of the transaction, the shoe company expects to book a one-time charge ranging from 28 cents to 33 cents per share in fiscal 2013. The stock is down 5.3 percent this year.

As per the impact on its overall figures, Brown Shoe expects a charge of 15 million to 17 million dollars in fiscal 2013 from costs associated with the sale of Avia and Nevados, with 11 million to 13 million dollars of the charge expected to be non-cash, company officials said.

As part of its corporate "realignment" around core brands, Brown also advanced at the time of the announcement that it will have to take a charge to earnings of somewhere between 0.28 and 0.33 dollars. On average, analysts were expecting 1.22 dollars per share.

Brown Shoe bought Avia and Nevados as part of its American Sporting Goods acquisition in February 2011. Later that year, the company sold the AND 1 brand, which also was part of the American Sporting Goods deal, for 55 million dollars.

Brown Shoe Co. operates nearly 1,300 Famous Footwear and Naturalizer retail stores in the US, Canada and China, and sells through several websites. Its wholesale brands include Naturalizer, Dr. Scholl’s Shoes, LifeStride, Ryka, Via Spiga, Vera Wang, Vince, Sam Edelman, Franco Sarto, Carlos Santana and Fergie Footwear.