The first IPO by an American designer in years is expected to earn Kors $111m.
Michael Kors Holdings will trade under the KORS ticker on the New York Stock Exchange, and plans to sell as many as 48m shares for $17 to $19 each.
Its a marvelously successful company, and I think an IPO will be very successful, Laurence Leeds, chairman of Buckingham Capital Management, told WWD. Theyre putting a high valuation on the company and it deserves a high valuation. The company is very well run, is extremely successful, has a splendid track record and excellent management.
Beyond the initial payout, the deal includes an employment agreement that promises Korss continued employment until death, disablement or for cause, at a minimum salary of $2.5m a year for life, before bonus and other perks. The agreement also stipulates that Kors shall have creative and aesthetic control of the products produced and sold under or bearing the Michael Kors and related trademarks, including exclusive control of the design of such products, provided that the exercise of such control must be commercially reasonable.
Kors has developed his line into a brand powerhouse over the past 30 years. Analysts anticipate that investors will be keen to buy into the brand less for its name recognition, however, than its growth potential. The company sees the possibility of expansion from its current 169 stores in the US to an eventual 400, and from 34 in Europe and Japan to 100 in each market.
Other fashion brands that have successfully gone public include Coach, Polo Ralph Lauren and Prada, which raised £1.3bn in its Hong Kong IPO earlier this year.More