World Footwear

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Michael Kors acquires Greater China licensee

Jun 1, 2016 United States
Michael Kors acquires Greater China licensee
The acquisition of Michael Kors (HK) Limited, the exclusive licensee of the Company in China, is now confirmed. The deal reached 500 million US dollars in cash, still subject to adjustments
"We are very excited about the acquisition of our Greater China licensee", stated John D. Idol, Chairman and Chief Executive Officer, adding: “we have worked diligently over the past several years, with our licensed partner in this region, to build the infrastructure, establish the brand, and grow acceptance of Michael Kors in the Chinese market. We believe that our brand is gaining strong momentum in Greater China, making it the ideal time for us to integrate this territory into our business and capitalize on the enormous growth potential in this region."

The acquisition was approved by the independent members of the company’s Board of Directors, upon recommendation of a Special Committee, comprised of solely independent directors, which was responsible for evaluating the terms of the acquisition. The Special Committee retained independent legal and financial advisors to assist in evaluating and negotiating the terms of the acquisition and the Purchase Agreement.

The Greater China business generated total revenue of 197 million US dollars for the year ended on the 31st of March 2016, with a network of 91 company operated retail stores and six travel retail locations, across China, Hong Kong, Macau and Taiwan.

For fiscal year 2017, the Greater China business is expected to contribute approximately 200 million US dollars to retail net sales, reflecting sales for the ten month period following the closing of the acquisition.

The acquisition is expected to be neutral to earnings per share on a GAAP basis, and accretive to earnings per share on a non-GAAP basis, excluding a 15 million US dollars one-time acquisition costs.

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