Marine Optical's only major eyewear license that is still up for sale is the Liz Claiborne brand, which is being covered by different firms. Lantis has taken over the Jordasch license, Marcolin has taken over the Cover Girl line, and Viva International has signed a letter of intent to acquire the rights to the Gant collection. All the new licenseholders are paying for the rights and for Marine's inventories, which are basically all the assets that Marine is left with.
Without disclosing the magnitude of Marine's debt, which is said to be high, the company's liquidators indicate that Marine's secured creditors will get only a small portion of their claims, while suppliers and shareholders will probably get nothing at all. Marine has not filed for bankruptcy protection, but it has ceased normal operations. After looking for a buyer for the whole concern, its primary lender, Dominion Resources, called for a voluntary liquidation.
Dominion acquired a stake of about 90 percent in Marine last October as part of a refinancing package that involved the conversion of some of its debt into equity. Dominion injected more money into the business to support a turnaround plan that didn't succeed. For the year 2000, Marine reported an operating loss of $4.6 million before depreciation and interest and a pre-tax loss of $13 million on revenues of $47.3 million.
One of the new licensees, Marcolin, has taken things seriously. Marine's financial problems led to some supply bottlenecks that the Italian company is endeavoring to resolve. Marcolin has taken full responsibility, starting last month, for production, deliveries and customer service of the Cover Girl line of ophthalmic frames and sunglasses previously licensed to Marine Optical by Procter & Gamble.
As the new licensee of the line, Marcolin plans to introduce a new collection and a new visual merchandising program early next year. The license covers North America, Mexico, most of Central America, Venezuela and some other Latin American markets. It also covers Australia, New Zealand, Austria, Switzerland and The Netherlands. The Italian group is budgeting minimum revenues of $5.8 million from the line in 2002, growing to $7.4 million in 2003.
Marine had a rather successful launch with the Cover Girl line at Vision Expo East in New York in the spring of 2000, offering frames and sunglasses that matched the colors of the lipsticks and other cosmetics developed by P&G for young girls. Launched in 1961, Cover Girl is still the best-selling brand of cosmetics in the USA.
Cover Girl is the 4th major license signed by Marcolin sofar this year, and it will help capitalize on the group's recent investment on a large new wholesale distribution operation in the USA. The other brands licensed earlier this year are Costume National, Montblanc International and The North Face.