Michael Kors set to float in the US

Another day goes by and more talk about potential IPO’s..

This time it is quintessential American brand Michael Kors. But rather than head to Hong Kong like other luxury houses, they are looking to float in the US.

Businessweek.com reports that Michael Kors are seeking to raise as much as $US792.3 million in a U.S. initial public offering as the company’s founder and the biggest investor trim their stakes.

In a regulatory filing, the company said that it is offering 41.7 million shares on behalf of existing shareholders, for $US17 to $US19 each. At the midpoint, the company would have a market capitalisation of about $US3.4 billion. Michael Kors Holdings isn’t selling any shares in the offering.

Michael Kors, the founder of the label is planning to cut his stake as retailers of luxury goods outperform mid-priced department stores this year.

“It strikes me as opportunistic,” said Steven Dennis, founder of luxury consulting firm Sageberry Consulting LLC.

“The stock market is better, and the luxury market has had a good run-up since the recession, and you can take some money off the table while you still have some momentum.”

Dennis also added that the Kors is “fashion forward and has a solid business”.

Michael Kors is planning to sell 5.8 million shares, trimming his stake to 8.6 per cent following the IPO from about 12 per cent.

“The company has done spectacularly well,” Marc Cooper, head of retail practice at investment bank Peter J. Solomon Co. told businessweek.com.

“They are super operators, they know how to build brands.”

The IPO is scheduled to price on December 14.

Image credit: menstylepower.com

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