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.”
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@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