Risky but rewarding luxury fashion IPO
Prada picked Hong Kong for its IPO and was successful at the time but is paying now the penalty for reaching out too far. The luxury apparel designer Michael Kors risked a lot more and made its IPO debut in New York (U.S.A.), he was not so greedy and had a rather modest public offering price of USD 20 per share.
A total of 47.2 million shares – 5.5 million more than initially expected – were sold. The Kors brand is 30 years old and is based in Hong Kong and the lines include clothing, footwear and other apparel and accessories distributed by high-end department stores and they are catering to the jet-set lifestyle and celebrities like Angelina Jolie and Heidi Klum.
Around 53 % of the companies turnover (per April 2) derives from wholesale sales by department and specialty stores and 43 % falls to the lot of the own retail sales points. In fiscal 2011 revenues increased by 58% to USD 803 million and global comparable-store sales increased 48% against 2010. In the first fiscal half year 2011 total revenue rose by 61% to USD 549 million and comparable-store sales increased by 42% mostly as a result of higher accessories and watch sales. Net income rose 85 % to USD 73 million and in the first six months until October 1, 20111 it doubled to USD 65 million.
Actually the number of stores in North America was increased by 30 stores in fiscal 2010 and 40 stores in fiscal 2011 bringing the total to 400.