For most people it’s a metaphysical question to contemplate. For designers who build brands around their names, the answer comes to dollars and cents.
Kenneth Cole offered late Thursday to the buy the shares of Kenneth Cole Productions Inc. he doesn’t already own for $15 a piece, valuing the whole firm at $280 million. The company had a market capitalization of about $850 million during its high in 2000.
Cole is the latest designer to try to come to terms with the value of the businesses bearing their names. Michael Kors took his company public in December and it now has a market capitalization of nearly $8 billion. Chris Burch’s stake in Tory Burch is on the block and some think the sale could value the firm at $2 billion or more — although that’s seen as too rich by many.
Michael Kors and Tory Burch are both businesses that are seen as having plenty of room to expand and so they get premium valuations. Cole, who took his company public in 1994, is looking to get his stride back. The firm took its sportswear business in-house last year and has been closing stores, which contributed to a loss of $10.9 million for the first nine months of 2011 on sales of $315.6 million.
Jeff Van Sinderen, an analyst at B. Riley & Co., said Cole wouldn’t get the type of valuation that Kors enjoys, but that if the business turned around it would be worth “probably a lot more than $15 a share.”
Cole’s offer represents a premium of 14.8 percent over Thursday’s close. Analysts and investors think Cole will eventually pay more, and shares of the company jumped 18.5 percent to $15.49 Friday.
As commonly happens, a number of law firms began immediately seeking out shareholders and investigating whether or not the company’s board is fulfilling its fiduciary duty related to the proposed buyout.
The designer already owns about 47 percent of the company and controls 89 percent of the voting power. In a letter to the firm’s board late Thursday, Cole said he had “no interest in a disposition or sale of my interest in the company” and that he wouldn’t support “any alternative sale, merger or similar transaction.”
Sam Poser, an analyst at Sterne Agee, said the key for the business is brand positioning. “If they really want to be an opening price point designer brand, it’s probably better to do it without the pressure of being a public company,” Poser said. “It would allow them to be freer and to do things that are more creative for the brand.”
Steven Marotta, an analyst at C.L. King & Associates, said the company is headed in the right direction, having brought back Paul Blum as chief executive officer, closed stores and focused on improving its product.
“Kenneth perhaps feels like: become a private company, be nice and quiet for a bit, start to grow again and then have an exit strategy when growth prospects are better,” Marotta said. “That means selling a bit of the company or going public again. That’s what a lot of companies do. They go public, they go private, they go public, they go private and everybody tries to make money on the in and out.”
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)