December 17, 2017

Is Tory Burch Going Public?

After reports of new investment firms' stakes in Tory Burch, it's likely the company will go public soon.

Hedge funds may want to get in now. Two investment firms disclosed ownership following a lawsuit settlement. With the success of the Michael Kors IPO, investors are hungry for a fast-growing retail company. Is Tory Burch going public? Clare O’Connor of Forbes describes what we know so far.

You heard it here first: 2013 will be the year of Tory Burch. On January 1st, the fashion mogul’s company made two big announcements, both of which will renew speculation of an impending IPO that could land the 46-year-old on the Forbes 400.

The board at Tory Burch’s eponymous brand and the designer’s ex-husband Chris Burch have settled “all pending legal claims”, per a statement, putting an end to an increasingly nasty and public battle of lawsuits and counterclaims.

Now, Chris has sold part of his 28.3% stake to two new minority investors, both with serious pedigrees: BDT Capital Partners, investment vehicle of Warren Buffett’s favorite banker Byron Trott; and General Atlantic, a private equity firm founded by philanthropist Chuck Feeney.

Feeney is the third high-profile name to be linked to the growing fashion house, which brought in $800 million in revenues in 2012 according to private company analysts PrivCo.

In 2009, Tory Burch LLC sold a minority stake of approximately 20% to Mexican private equity firm Tresalia Capital, chaired by Corona beer heiress María Asunción Aramburuzabala of the Group Modelo family.

Warner Music owner Len Blavatnik was the main outside investor initially, with a designated board seat. The Russian-born billionaire also has financial interests in some of Chris Burch’s businesses, landing him at the center of a motion to compel evidence in December.

This week’s settlement and announcement of new investors could well pave the way for a public offering, although Tory Burch herself has been careful to quash speculation of an imminent float that would likely make her a billionaire. In a November interview with CNN, she dismissed talk of taking her growing brand public, citing her privacy as paramount:

“It’s not something I’ve ever thought about clearly and it’s not going to happen anytime soon. I am personally not ready to be a public [chief executive officer]. Privacy [is what I would lose.] I am not saying exactly that one day it won’t happen but for now it’s not in the cards.”

Basically it’s in the cards. In 2011, Burch hired Barclay’s Capital to seek a strategic partnership with Coach or LVMH, or the Carlyle Group, according to the website Business of Fashion.

Tory Burch’s revenues have been increasing every year since its 2004 launch. PrivCo, a website that publishes financial data for private companies, reported EBITDA (earnings before interest, tax, depreciation and amortization), a measure of operational profitability of $150mm and $229mm for 2011 and 2012 respectively. Hedge funds may want to take a closer look at financials but the outlook for the company seems positive. Stores are expanding as is hiring. So is Tory Burch going public? Probably.

Comments

  1. A very impressive young woman. Tory should be a role model for young women anywhere in the world. Very impressed and certainly a great case study of balancing right and left brain.

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