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Michael Kors goes public to raise Rs 4,500 cr

By FashionUnited

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Holdings Ltd., the luxury fashion and accessories brand, has announced its decision to prepare an Initial Public Offering (IPO) in New York, hoping to raise about $900 million (Rs 4,500 crores). The company has set the price range

for the offers at $17 to $19 a share, with plans to sell 41.7 million shares.
 
Michael Kors Holdings, named after Chief Creative Officer and Director Michael Kors, has 169 stores in North America and 34 in Europe and Japan. The company, which is present in 74 countries, generated $803 million (Rs 4,000 crores) revenues in fiscal 2011, up 58 percent from the year before.
 
A to
tal of 5.8 million shares are being offered by Kors himself, while Chief Executive Officer, John Idol and the company's largest existing shareholder, Sportswear Holdings Ltd.
 
The Hong Kong-based company intends to trade under the name of KORS on the New York Stock, according to WWD. The company hopes to sell 48 million shares, including over-allotments, between $17 to $19 (Rs 850-950) a piece. Therefore, the company will be valued at somewhere near $3.62 billion.
 
According to the trade, “Kors, which has both established its reputation and has room left to grow, is one of a small group of designer brands that is seen as ready to take this step,” and it’s noted that the company is one of the very few designer apparel firms to go public in recent years. The luxury American fashion brand also plans on opening hundreds of stores across North America, Japan and Europe.
 
The syndicate is large and includes Morgan Stanley (NYSE:MS), J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Baird, Jefferies (NYSE:JEF), Nomura (NYSE:NMR), and Piper Jaffray (NYSE:PJC).  The underwriters will also have a 30-day option to purchase up to an additional 6,255,000 common shares from the selling shareholders.
 
Total revenue was US$803.3million (Rs 4016 crores)  in 2011, up from US$508.1 million (Rs 2,540) crores the previous year. In the same periods, net income was US$72.5 million (Rs 362 crores), compared to the US$39.2 (Rs 196 crores) they achieved in 2010. Sales growth north of 50% and more than 80% income growth.

Image: Michael Kors Holiday '11

Michael Kors