Steiner Leisure Ltd. has agreed to acquire Bliss World Holdings, Inc. from Starwood Hotels & Resorts Worldwide Inc. for $100 million, a divestiture that will allow Starwood to focus more closely on its core hospitality business, the firm stated Monday.
The deal, expected to close on or before Dec. 31, calls for Steiner to purchase all the issued and outstanding capital stock of Bliss. The acquisition is expected to be slightly accretive to Steiner’s 2010 earnings, according to the company, which operates spas and salons on 126 cruise ships and in 51 resort spas and two luxury day spas.
During a conference call with Wall Street analysts Monday afternoon, Leonard Fluxman, president and chief executive officer of Steiner, called the deal a “transformational acquisition going forward.”
He stated he is pleased about “the opportunity to introduce Bliss products and broaden the appeal of the brand through our distribution channels.” He also noted Steiner’s existing skin care brands, like Elemis and La Therapie, would benefit from Bliss’ distribution network.
“It will help us broaden our existing skin care platform,” he told analysts.
Bliss has 13 freestanding and hotel spa locations in the U.S., offers services under the Bliss and Remède brands and markets products under the Bliss and Laboratoire Remède brands. (Remède has four U.S. spas.)
Bliss also operates e-commerce and catalogue businesses. Its products are carried at 825 doors in the U.S., including at such retailers as Bloomingdale’s, Macy’s, Neiman Marcus, Nordstrom, Saks Fifth Avenue, Sephora and independent boutiques.
With Bliss’ 100 international doors of distribution including Harrods and Harvey Nichols, “internationally, there’s much scope or growth,” Fluxman said on the call, noting one strategy for building brand awareness overseas will be through hotel amenities programs.
Internationally, Bliss has four Bliss spas and four Remède spas.
As part of the transaction, Bliss and Remède spas and amenities will remain exclusive to Starwood for the hotel category at W Hotels and St. Regis Hotels.
“This sale is illustrative of our long-term strategy to focus purely on our growing and increasingly global hospitality business,” stated Frits van Paasschen, president and chief executive officer of Starwood.
Bliss’ annual sales are about $85 million, with 50 percent of that coming from spa revenues, 28 percent from wholesale distribution and about 22 percent from its direct sales business.
The purchase price for Bliss is payable in cash at closing, and the buy will be funded from existing cash — including a $7.5 million deposit from Steiner that has already been paid from cash on hand — and through borrowings under a new credit facility, the firm stated.
In connection with the acquisition, Steiner entered into a new credit facility Monday with a group of lenders including SunTrust Bank, Steiner’s existing lender, consisting of a $60 million revolving credit facility, with $5 million swingline and $5 million letter of credit subfacilities, and a delayed draw term loan facility of $50 million, both maturing Oct. 30, 2012.
When an analyst asked what management changes there might be as a result of the change in ownership, Fluxman replied that, while some initial integration has occurred in the human resources and information technology departments, “I don’t want to change the culture. They have a fantastic team there [and] I’m pleased to be part of the Bliss family.” He lauded the brand’s president, Richard Dantas, and said he has a “strong” team beneath him.
In January 2004, Starwood announced it had purchased a majority stake in BlissWorld LLC from LVMH Moët Hennessy Louis Vuitton for an estimated $25 million.
LVMH had acquired 70 percent of the trendy beauty firm in February 1999 from Marcia Kilgore, who founded Bliss in 1996 but is no longer involved with its operations.
However, Kilgore’s Fit Flop footwear brand is carried at Bliss spas, in its catalogues and on its Web site.
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