By  on March 7, 1994

NEW YORK -- The secondary market for apparel issues has heated up recently, providing a fountain of cash for corporate principals.

In secondary offerings made over the past four months by Jones Apparel Group, Kohl's Department Stores, Reebok International Ltd., Tommy Hilfiger Corp. and Nautica Enterprises, management took home big bucks.

Principals at Chico's FAS, Gymboree Corp. and Sunglass Hut also each sold shares in secondary offerings in the second half of 1993, riding the strength of highly successful initial public offerings earlier in the year.

The biggest payday went to management and principals of Kohl's, who realized $209.7 million in a secondary offering in February.

Principals at Kohl's have realized approximately $605 million through the May 1992 IPO and three secondaries.

Kohl's largest shareholder, William S. Kellogg, chairman and chief executive officer, took in $30 million in the latest offering, priced in February, after having realized a total of $55 million from previous offerings.

Kellogg now holds a 9.4 percent stake in the company, down from 22.9 percent at the IPO.

Including the latest offering, Jay H. Baker, Kohl's president, has realized $43 million from stock sales, and John F. Herma, executive vice president and chief operating officer, $30 million.

The Morgan Stanley Leveraged Equity Fund II, which funded Kohl's leveraged buyout in 1988, has realized about $318 million from stock sales in the three public offerings. Kohl's management and Morgan Stanley acquired Kohl's for $174.3 million in 1988.

Another big winner in the secondary market was Sidney Kimmel, founder and chairman of Jones Apparel, who took home $79.3 million in February from the sale of 2.8 million shares.

Since his company went public in March 1991, Kimmel has regularly been selling his shares, raking in a total of $260 million through the IPO and three subsequent offerings. Kimmel, who was sole owner of Jones Apparel prior to going public, now holds a 32 percent stake in the company.

In the Reebok offering last month, Paul Fireman, chief executive officer and chairman at Reebok International Ltd., and his wife, Phyllis, sold 1.5 million shares each, raising about $50 million each. Reebok also plans to buy another 1 million shares from the Firemans as part of its stock buyback program announced last year.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus