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Royal Caribbean (RCL) Reaches Agreement to Sell Azamara Brand

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Royal Caribbean Group (RCL - Free Report) recently reached a definitive agreement to sell its Azamara brand to a private equity firm focused on consumer, retail and distribution investments. Notably, the deal is valued at $201 million.

Sycamore Partners will acquire the entire Azamara brand, which includes its three-ship fleet and associated intellectual property. The transaction is likely to be concluded in first-quarter 2021. This deal will help the company to focus on increasing its Royal Caribbean International, Celebrity Cruises and Silversea brands.

The company announced that this transaction will result in one-time, non-cash impairment charge of nearly $170 million. The sale of Azamara is not likely to have any material impact on Royal Caribbean’s future results.

Chairman and CEO of Royal Caribbean said “Our strategy has evolved into placing more of our resources behind three global brands, Royal Caribbean International, Celebrity Cruises and Silversea, and working to grow them as we emerge from this unprecedented period.”

Price Performance

In the past year, shares of the company have slumped 43.4%, compared with the industry’s decline of 27.9%. The company’s performance has been impacted by the coronavirus pandemic.



Due to the COVID-19 crisis, the company had to cancel sailings. The bookings still remain constrained but it is now better than it was in mid-April, 2020. Management stated that it continues to witness steady improvement in bookings for 2021 as summer sailing has been driving demand. Further, Royal Caribbean announced that bookings for second half of 2021 are within the historical ranges. Bookings for 2021 are benefiting from rebooking activities related to Future Cruise Credit (FCC) and [indiscernible] program. The company stated that nearly 80% of its bookings of 2021 to date are new and more than 65% of bookings made since early August have been new.

Royal Caribbean — which shares space with Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Carnival Corporation & Plc (CCL - Free Report) in the Zacks Leisure and Recreation Services industry — currently carries a Zacks Rank #3 (Hold).

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