NEW YORK — Over 200 investors filed into The Pierre hotel here Thursday for the New York stop on the Michael Kors initial public offering road show.
Though Securities and Exchange Commission rules bar press coverage of the briefing, market sources said the luncheon presentation in the Cotillion Room focused mostly on the company’s U.S. and European retail growth opportunities and its continued emphasis on accessories.
The Kors IPO is expected to be priced on Dec. 14, and the company is prepared to go public Dec. 15. Shares are expected to be priced between $17 and $19, and the company plans to sell up to 48 million shares — 41.7 million initially and an additional 6.3 million if demand warrants. As reported, the IPO could value Michael Kors Holdings Ltd. at $3.63 billion.
“This will be a very desired offering. The company has experienced incredibly rapid growth,” said Laurence C. Leeds Jr., chairman of Buckingham Capital Management.
During an hour-long presentation by John Idol, chief executive officer, and Joe Parsons, chief financial officer and chief operating officer, sources said they gave a detailed picture of the $803.3 million company’s growth prospects. Neither Kors nor his partners, Silas Chou and Lawrence Stroll, were in attendance. Idol spoke about the rollout of 400 stores throughout the U.S. and Europe, as well as the fact that it took control of its Japanese business at the end of last year. He also discussed plans to open 150 doors in Japan, with 10 already open. With a penchant for corner properties, Idol said the company’s real estate strategy is to open “sexy corners” in cities around the world, including malls and airports.
Kors has found a niche in manufacturing luxury accessories that are well priced. Idol quipped that the designer always likes to say: “We’re the Hermès of Staten Island.”
Idol told the packed room that Kors has 71 percent name recognition in the U.S. and 35 percent in Europe. Companies like Ralph Lauren have over 90 percent name recognition, so the Kors team feels there’s room for growth. Idol said its business model is more along the lines of Coach and Burberry and is truly focused on accessories. Idol also pointed out that Kors is the second largest designer watch company after Chanel, and that the firm has three licensees and isn’t looking to add any more at this time. He noted that the success of “Project Runway” in the last nine years has been a real boost to the brand’s recognition.
Idol recalled when he first joined the firm he asked Kors what the average age of his consumer was, and Kors said, “35.” Kors told him that every woman who’s 50 wants to look 35, and every girl who’s 19 wants to be 35.
The ceo described the company’s strong financial picture, and positive comp-store growth. He also took the opportunity to show images from the company’s fall ad campaign and to discuss its social media efforts. Parsons then took to the podium and described the company’s operations, and noted that the firm will open a 500,000-square-foot warehouse in Whittier, Calif.
Idol and Parsons plan to hit several more cities over the next week, including Kansas City, Mo.; Denver; San Francisco, and Los Angeles, before pricing the stock.
David Menlow, president of IPOfinancial.com, a Millburn, N.J.-based company, said in a telephone interview Wednesday that the IPO process was very compressed. “Part of it is they are a Hong Kong-based company and there are a different set of procedures with foreign offerings,” he said. He believes that the stock will have a premium of 5 percent from the opening of trading.
“I think it’s a horrible environment. Valuations are so low,” said Menlow. “Converse of that, if it’s bad for the issuer, it’s good for the buyer. I would counsel any company not to go public right now. This is not the right time if you are an issuing company. If the market continues to improve, and Michael Kors came to the market a year from now, I believe the valuation would be substantially higher.”
Josef Schuster, ceo and founder of IPOX Schuster, Chicago-based financial services firm, said, “I think they’re using a window of opportunity. There are a lot of global luxury goods players going public. Stars are aligning for the company to capture the imagination of the luxury goods sector. The markets don’t look bad, and the S&P is flat for the year. Typically, it can happen pretty quickly. The window will close between Christmas and January, so why not pursue it now?”
He believes the stock will be priced between $17 and $19 but more “toward the middle, toward the high end. I think there will be fairly good demand.” He said he plans to buy stock in the company.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews