When sales of Jessica Simpson’s fashion line reached $750 million, and were predicted to soon surpass $1 billion, it was noted that she was doing roughly the same sales volume as Michael Kors. If she is the $1 billion girl, Kors — now happily distanced from her — is the $2.5 billion man. In a deal to sell a minority stake of his company to a group of investors including “Tommy Hilfiger and members of his inner circle, as well as sovereign wealth funds,” the Post reports, that’s how much his company was valued at. A source tells the paper the brand could file for an IPO as soon as 2012, and investment bankers are glowing over Kors’s valuation, which is greater than 25 times the label’s EBITDA (earnings before interest, taxes, depreciation, and amortization).
“This is luxury’s day,” said Richard Kestenbaum of New York investment bank Triangle Capital. Fears of a double-dip recession notwithstanding, demand for designer merchandise with fat price tags continues to climb, he said.
Well this is what happens when the rich hold off on spending to be polite for so long. They stop caring and just binge. Finally, it’s their day.
Michael Kors sells minority stake in deal that values brand at $2.5B [NYP]