In a move crucial to the future of Kate Spade LLC, Neiman Marcus Group said in a filing with the Securities and Exchange Commission on Thursday that it will purchase the remaining 44 percent of the accessories firm for about $59 million.
The value of the entire company is estimated at $134 million.
Owners Kate and Andy Spade and their partners, Pamela Bell and Elyce Arons, exercised a put option in April 2005. That option to sell at a specified price by a certain date was part of their contract with Neiman Marcus, which acquired a 56 percent stake in the brand for $33.6 million in 1999 from Alex Noel Inc. Texas Pacific Group and Warburg Pincus LLC, two equity firms, bought NMG for $5.1 billion in May 2005.
"We chose to put our stock to Neiman Marcus Group and are pleased with the valuation placed on our 44 percent of the company,'' said Andy Spade, chief executive officer of the 13-year-old brand. "Our primary concern right now is running our business with an eye toward both our future and the future of the brand."
The purchase of the minority investors' interest is expected to close no later than January, according to the SEC filing.
NMG put Spade on the auction block in September 2005 and hired investment-banking firm Peter J. Solomon Co. to handle any sale of the New York-based company.
Liz Claiborne is said to be a frontrunner to acquire Kate Spade, although industry sources said that other buyers were still in the game. VF Corp. was said to be a contender earlier this year.
Sources said that the Spades have an employment contract with Neiman Marcus, but that the eventual buyer will have to renegotiate the contracts.
There has been a question about whether the Spades will remain at the company, which was catapulted by their signature nylon bags, and has since grown into categories such as footwear, eyewear and stationery, which are all sold through their 19 boutiques as well as specialty stores. The sale to Neiman Marcus does not change the Spades' involvement in the company, sources said.
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