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Neiman Marcus and Saks Fifth Avenue stole the takeover headlines this year, but there was plenty of other dealmaking going on.
Luxury giants invested in brands that brought with them creative talent; private equity firms and other big-time investors added to their stables; strategic acquirers consolidated their power in certain categories, and some owners sought to unlock value though initial public offerings.
While not exactly a boom time, 2013 did mark the continuation of the seller’s market, with strong and still-growing brands finding plenty of suitors and commanding higher multiples. Here, a look at some of the action this year.
BIG NAMES BUYING INTO FRESH FACES: LVMH Moët Hennessy Louis Vuitton took a significant minority stake in J.W. Anderson’s fledgling business and installed the designer as the creative head of Loewe. The luxe giant also snapped up a majority stake in shoe designer Nicholas Kirkwood, while rival Kering made a minority investment in Joseph Altuzarra’s company and took a majority stake in Christopher Kane, and made a “significant” investment in the signature brand of Tomas Maier, the creative director of its Bottega Veneta brand.
Alexis Babeau, managing director of the Kering Luxury division, said of the Altuzarra deal: “By endorsing a young French-American designer to help accelerate the development of his brand, Kering fulfills its mission to empower new creative talent.”
BIG MONEY EQUITY BUYS: Private equity giant KKR & Co. took a 65 percent stake in SMCP Group, which operates the Sandro, Maje and Claudie Pierlot fashion chains. Qatari-backed fund Divine Investments SA bought French retailer Printemps, taking Deutsche Bank’s 70 percent stake and Borletti Group’s 30 percent holding, and Apax Partners took over teen retailer Rue21 Inc. for $1.1 billion.
Being bought by a big investor often means having some extra juice to explore strategic options. Divine, for instance said it “plans to continue the development of the Printemps Group both in Paris and in the rest of France, and to contribute to the international development of this symbol of French fashion and luxury.”
CONSOLIDATING THE MARKET: The Swatch Group Ltd. shelled out $1 billion, including debt, for the diamond jewelry and timepiece division of Harry Winston. LVMH took an 80 percent stake in Loro Piana for about $2.6 billion. Hanesbrands Inc. bought Maidenform Brands Inc. for $583 million. TowerBrook Capital Partners bought True Religion Apparel Inc. for $824 million. Joe’s Jeans Inc. snatched up premium denim brand Hudson Jeans for $97.6 million. The Men’s Wearhouse Inc. acquired the Joseph Abboud brand for $97.5 million in cash, and just last week, an affiliate of Leonard Green & Partners acquired Lucky Brand from Fifth & Pacific Cos. Inc. for $225 million.
There are usually both strategic and cost savings reasons to cut such deals. Richard A. Noll, chief executive officer of Hanesbrands, said the Maidenform deal was “a great way to spend less than 18 months of our free cash flow” and noted that the synergies between the two companies would help add $65 million worth of free cash flow annually.
GOING PUBLIC: Sun Capital Partners’ Kellwood Co. division held an IPO for Vince, raising $200 million. Bain Capital-owned off-pricer Burlington Stores Inc. raised $226.7 million jumping into the public markets. This month, Sears Holdings Corp. said it would spin off its Lands’ End business, returning the sportswear outfitter to the public markets. And others are considering the plunge. TPG Capital and Leonard Green & Partners are said to be weighing an offering for J. Crew Group Inc. next year and designer Marc Jacobs is thinking along the same lines, but further down the road.
Moncler, which closed its road show last Wednesday, said investors’ share requests exceeded 14 times the number of shares offered to the public in Italy. With the shares priced at 10.20 euros each, or $14.07 at current exchange, the total net proceeds from the offering are 989 million euros, or $1.36 billion. Moncler’s first day of trading is set for today on the Milan Stock Exchange.