According to the NY Post, designer & Project Runway judge Michael Kors is quietly looking to raise as much as $500 million in private investment to fund his aggressive global-expansion plans. With the help of advisers, including Morgan Stanley, Michael Kors is looking to sell an equity stake of about 25 percent in the coming months, sources said.
This deal would therefore be among the fashion industry’s largest during the past several years. The equity sale would value Michael Kors at an astonishing $2 billion, which is about twice the company’s annual revenue.
Despite the steep markup, “people seem to be falling over each other to be a part of this,” according to one person briefed on the deal. That’s partly because Michael Kors, which has more than doubled in size during the past four years, is still turning a profit despite the costly expansion of its retail presence. With more than 100 stores worldwide, Michael Kors plans to double that figure in 2012.
The growth strategy has been masterminded by Silas Chou and Lawrence Stroll, the fashion financiers who took Tommy Hilfiger public in the early 1990s after taking control of it privately a few years earlier. Having poured $100 million into Michael Kors in exchange for a majority stake in 2003, Chou and Stroll aim to further multiply the value of their investment with an initial public offering of Michael Kors “sometime in the next few years,” according to a source. Wow.
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