Kors I.P.O. Makes Its Debut in Style
Michael Kors brought some glamour — and a big initial public offering — to the New York Stock Exchange Thursday morning.
A Michael Kors billboard was draped across the Corinthian columns on the exchange building’s facade.
Outside, Mr. Kors and his mother, Joan Kors, posed for pictures, both sporting December tans, trendy sunglasses and huge smiles. And inside, at 9:30 a.m., high above the trading floor, Mr. Kors rang the opening bell, high-fiving and hugging his chief executive, John Idol, and two backers and fashion tycoons, Lawrence S. Stroll and Silas K. F. Chou.
Mr. Kors, the American fashion designer, had good reason to celebrate. In the face of a tepid stock market, his company had a successful initial public offering. Its shares opened at $25, up 25 percent from their $20 offering price, and closed at $24.20. The I.P.O. raised $944 million.
All of the I.P.O. proceeds went to Mr. Kors and other selling shareholders. The company itself did not raise any money in the offering.
Mr. Kors, 52, perhaps best known for his role as a judge on the fashion reality show “Project Runway,” sold about $117 million worth of stock on the deal, and maintains an 8.6 percent stake that is worth some $400 million.
The biggest winners are Mr. Stroll and Mr. Chou, who cashed in about $520 million worth of their holding company’s shares and still own about 35 percent of the business, a position worth about $1.7 billion.
At its current stock price, Kors, the business, is worth about $4.6 billion.
The company, which was founded in 1981 and is based in Hong Kong, is one of the world’s fastest-growing retailers. Its profits nearly doubled in its most recent fiscal year, which ended April 2, over the previous one, and its sales increased by about 60 percent.
Though Mr. Kors continues to design his signature couture collection, most of the company’s growth has come from an “affordable luxury” line that sells less expensive purses and clothes at department stores like Dillard’s and Macy’s.
Industry analysts have questioned whether Kors can continue to expand without weakening its brand. In that regard, Kors hopes to replicate how the designer Ralph Lauren has brought his designs down market without tarnishing his label’s prestige.
Though Internet businesses like Groupon and Zynga have been the primary focus of the I.P.O. market in the last year, several high-profile apparel companies have also sold shares to the public. The Kors offering follows stock sales over the summer by the European fashion houses Prada and Salvatore Ferragamo.
September 9
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