Kurt Geiger sponsor Cinven taps Bank of America to assess sale

19 February 2020

Buyout house Cinven is assessing options for portfolio company Kurt Geiger which could lead to the sale of the UK upmarket footwear and accessories retailer, three sources familiar with the situation said.
Bank of America will be guiding the sponsor in its assessment, the sources said, with one of them adding that the appointment came on the back of inbound interest from trade players.
Teasers for a potential sale could be sent out as early as this month, one of the sources said.
Kurt Geiger has reportedly held informal discussions with prospective buyers from the US fashion sector including Coach, Michael Kors and Steven Madden. Canadian footwear company ALDO could also show an interest given it already supplies to Kurt Geiger shops, one of the sources said.
Cinven will be looking for a valuation as high as 12x EBITDA, the first source said. The company sits in a good space as it offers personalisation and range, which makes such valuation possible, a sector banker said.
Kurt Geiger is expected to generate GBP 40m-GBP 45m EBITDA in the fiscal year ended January 2020, the third source said.
The company reported GBP 349.2m sales in the year ended January 2019, up 3% year-on-year, and EBITDA of GBP 38m, up 5.6% in the period, according to public filings for holding company Mercury Midco 1 Limited.
During 2018, Kurt Geiger expanded its wholesale business to the US and continued to grow in Europe and Asia, according to the filings. However, according to two of the sources, the business remains very much focused on the UK.
The performance of Kurt Geiger, which operates Harrods and Selfridge’s footwear departments, could be affected by a reduction of Chinese shoppers in the UK due to the coronavirus outbreak, one of the sources said.
Recent deals in the European footwear space include Permira’s acquisition of Italian high end footwear company Golden Goose from Carlyle for around EUR 1.3bn in a contested auction processes that attracted the interest of sponsors such as Eurazeo and Advent, as reported.
Cinven acquired Kurt Geiger in 2015 from Sycamore Partners for a reported GBP 245m, which represented 8.2x Kurt Geiger’s 2014 earnings.
Kurt Geiger, which opened its first store in London in 1963, has over 70 stores and more than 170 concessions in department stores, according to its website. It sells both third-party and owned brands.
Cinven and Bank of America declined to comment. Kurt Geiger did not respond to requests for comment.