Dec 5, 2011
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Michael Kors Holdings IPO values co at $3.63 bln

Dec 5, 2011

Michael Kors Holdings Ltd, known for its eponymous luxury lifestyle brand, filed with U.S. regulators on Friday for an initial public offering of common stock that values the company at as much as $3.63 billion.

Michael Kors
Michael Kors SS 2012 / Photo: Pixel Formula

The offering comes at a time when many companies are trying to squeeze in their IPOs as the window of opportunity prised open by Groupon's listing last month closes with the holiday season kicking off later this month.

Earlier on Friday, Zynga Inc, the maker of Facebook games, set the terms for its offering -- one of the most highly anticipated deals of the year -- and is expected to start trading in mid-December.

Michael Kors Holdings, with 169 stores in North America and 34 in Europe and Japan, is named after Chief Creative officer and director Michael Kors, a well-known fashion designer and one of the judges on the long-running TV fashion show "Project Runway".

The company, which intends to issue 41.7 million shares in the price range of $17-$19 apiece, is expected to price its IPO on Dec. 14.

"There's definitely a lot of support for this offering. High-end luxury brands in terms of IPO performance have done okay and Michael Kors will benefit from that," said Josef Schuster, founder of IPOX Schuster, a fund that specializes in investing in newly public companies.

"They are taking advantage of the window of opportunity in the speciality consumer sector."

Michael Kors Holdings' filing follows that of Italian fashion house Prada SpA, which listed earlier this year in Hong Kong, after raising $2.1 billion in an IPO.

Italian luxury shoemaker Salvatore Ferragamo also listed earlier this year.

Michael Kors himself is selling 5.8 million shares in the IPO. Others offering shares include the company's chief executive John Idol and its largest shareholder, Sportswear Holdings Ltd.

The company, present in 74 countries, competes with luxury like retailers such as Coach, Burberry, Ralph Lauren and Hermes International.

Hong Kong-based Michael Kors Holdings, which sells fashion accessories, footwear and apparel, reported net income of $72.5 million on revenue of $803.3 million in its fiscal 2011.

In the preliminary filing, it said that Morgan Stanley, JP Morgan and Goldman Sachs & Co were the lead underwriters for the IPO.

Michael Kors Holdings also said it had granted underwriters the right to purchase an additional 6.25 million shares to cover over-allotment.

The company said it currently expects to retain all its future earnings for use in the operation and expansion of the business.

It plans to list its common stock on the New York Stock Exchange under the symbol "KORS."

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

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