Caught in a jam, hip-hop clothing kingpin Marc Ecko may soon lose control over his own name, The Post has learned.
The debt-ridden designer — backed against a wall as creditors threaten to force his flailing empire into bankruptcy — is in talks to sell a controlling interest in his trademark to Iconix, a fast-growing collector of middle- and upper-tier fashion brands.
Sources said New York-based Iconix — which recently scooped up 50 percent of Ed Hardy, the tattoo-inspired streetwear label — is nearing a deal to acquire at least 51 percent of Marc Ecko’s intellectual property. Under the hard-knuckle terms of the deal, Ecko could be forced to license back his trademark to run his wholesale and retail businesses, sources said.
While negotiations aren’t final, an agreement could be announced within the next two weeks, sources said. One potential stumbling block: Ecko and his longtime CEO Seth Gerszberg are “in a feud right now,” according to one source close to the situation.
“They don’t talk to each other and they’re not working with each other,” the source said. “For anyone licensing this brand, that’s going to be a big hurdle to overcome.”
The solution could be for one or both of the famously extravagant hip-hop entrepreneurs to exit the business altogether. In the meantime, sources said Marc Ecko is still occupying its palatial, 280,000-square-foot office in Midtown, which is outfitted with a basketball court.
Marc Ecko representatives didn’t respond to a request for comment, and an Iconix spokeswoman said in an e-mail that the New York-based company “does not comment on rumors.”
Iconix — whose portfolio of brands ranges from upscale designer Badgley Mischka to middle-market staples like Joe Boxer and Ocean Pacific — would pay as much as half of what Marc Ecko owes to a key creditor in an all-cash deal, according to a source close to the situation.
As first reported by The Post in March, Marc Ecko this spring hired investment bank Peter J. Solomon to begin dismantling his empire to pay off debts. Officials at Peter J. Solomon declined to comment yesterday.
After defaulting on a term loan of more than $70 million from a syndicate led by embattled commercial-lending giant CIT, one source said Ecko has made the bank syndicate “comfortable” by selling off a handful of brands and licenses this summer, including the Avirex brand.
Under the pending deal, Iconix would immediately pay half of the more than $100 million Marc Ecko owes to Li & Fung — a global trading company that helps manufacture Marc Ecko’s clothes.
Additionally, Iconix has discussed taking the remainder of the debt onto its own balance sheet — a “clever way to cut a debt-financed transaction during a credit crunch,” according to one source close to the situation. james.covert@nypost.com