Photographer: Balint Porneczi/Bloomberg

KKR-Backed Owner of Maje Fashion Chain Files for French IPO

  • SMCP says possible IPO would happen in first half this year
  • Accessible luxury company said to be valued at $1.1 billion

KKR & Co.’s French clothing retailer SMCP could sell shares in an initial public offering by the summer after doubling its sales over the past three years.

SMCP took the first step to a possible IPO in the first half of this year by filing a registration document with the French market regulator, Chief Executive Officer Daniel Lalonde said Tuesday at a news conference in Paris. He declined to disclose the size of the planned offering, though it includes a goal of raising as much as 175 million euros ($193 million) by selling new shares to pay down debt, the CEO said. The filing doesn’t exclude selling SMCP to a private investor, he also said.

SMCP, which operates “accessible luxury” brands Sandro, Maje and Claudie Pierlot, may be valued at more than 1 billion euros in the sale, people familiar with the matter said Monday, asking not to be named as the details aren’t public yet.

The fashion company, which gets half of its sales in France, plans to open stores in countries including China, the U.S., the U.K., Spain and Italy as it targets annual growth of as much as 13 percent through 2018, Lalonde said. Revenue surged 33 percent last year to 675 million euros, with same-store sales excluding currency swings up 11 percent. Earnings before interest, tax, depreciation and amortization climbed 44 percent to 107 million euros. The company has more than 1,000 sales outlets.

“We are confident that we will continue pursuing profitable growth,” Lalonde said. SMCP is well-positioned to capitalize on demand for 495-euro velvet jackets and 215-euro fringed handbags as a retailer “combining the codes of luxury and fast fashion.”

The 96 billion-euro accessible luxury market, which includes brands such as J. Crew, Ted Baker and Kate Spade, is forecast to grow an average 6 percent a year through 2020, Lalonde said, citing an estimate from Boston Consulting Group. That compares with annual growth of 4 percent for the total luxury market and 2 percent for the mass market in the same period, he said.

The decision to pursue an IPO this year contrasts with Italian fashion house Valentino, which has ruled out listing until at least 2017 because of recent market declines that have wiped billions off the value of luxury stocks. It’s probably not the best time to go for an IPO, Valentino CEO Stefano Sassi said in an interview Monday.

KKR, the New York investment firm run by Henry Kravis and George Roberts, bought 65 percent of SMCP in 2013. KKR now owns 70 percent, with SMCP’s management and founders sharing the rest, according to Lalonde.

The investment firm has also weighed a private sale of SMCP, people familiar with the matter have said. Shandong Ruyi Group, the Chinese textile producer, had emerged as the preferred bidder for SMCP last month after competitors including Lion Capital dropped out of the bidding, they said. A spokesman for SMCP declined to comment on the negotiations.

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