Sequential Brands Group is selling the Martha Stewart and Emeril Lagasse brands to Marquee Brands for $175 million. There is earnout provision for Sequential to receive as much as an additional $40 million if the brands’ sales meet certain goals. The sale is expected to close in Q2.

For Marquee, the purchase is the most recent since it closed a $462 million funding round in 2016 designed for acquisitions. Marquee owns the Bruno Magli, Ben Sherman, BCBG Max Azria, Body Glove and Dakine brands. It was founded in 2014.

The purchase represents Marquee’s entrance into the food, homegoods and media categories. Emeril Lagasse has deals in food as well as kitchenware, including a recent agreement with Tristar Products for an air fryer and grilling products. Carolyn D’Angelo, who headed the Martha Stewart brand for Sequential, will be president of Marquee’s new home division.

“We are committed to making impactful investments across marketing and our established e-commerce platform to support these brands. We look forward to this best-in-class team joining our organization to help us drive continued growth,” Marquee President Michael DeVirgilio said in a statement.

The sale enables Sequential to make “meaningful progress” in paying off debt, which stood at $634.7 million as of Dec. 31, the company said.  At the same time, it will allow the company to focus on its Gaiam, Jessica Simpson, Joe’s, And1 and Avia brands and “drive even more profitable growth,” Murray said. The core brands have the “highest margins and attractive growth prospects,” said Sequential Chairman William Sweedler.

Sequential acquired the Martha Stewart and Emeril Lagasse brands for $353 million in 2015 and at the time forecast the company’s revenue would hit $250 million by fall 2018. It posted revenue of $169.8 million in the year ended Dec. 31.

“While we have made significant progress with the Martha Stewart and Emeril Lagasse brands, we determined the best direction for the Company going forward is to focus on our core active and fashion brands,” Murray said. “I have confidence that the Martha Stewart and Emeril Lagasse brands will continue to flourish under new ownership as they build on what we have accomplished to date.”

Sequential has moved during the past year to pare down its portfolio.  It sold the Revo (eyewear) and Ful (bags, backpacks) brands last year to B. Robinson and Concept One, respectively. Sequential has said in the past that it also was seeking buyers for the Nevados (hiking boots), Caribbean Joe (luggage, swimwear) and The Franklin Mint (coins, jewelry) labels. It took a $17 million impairment charge for the Ellen Tracy and Caribbean Joe brands for the year ended Dec. 31.

Contacts:

Marquee Brands, Cory Baker, COO, 646-661-7780, cbaker@marqueebrands.com

Sequential Brands Group, Peter Lops, CFO, 646-564-2577