Guess How Many Billions Michael Kors Is Worth Now?

by Justin Fenner | 4:23 pm, August 11th, 2011

If Michael Kors wasn’t rich enough already, he just got even richer. The recent sale of a 20 percent equity stake in his fashion label valued his company at 2.5 billion dollars. It’s not a record, but it is impressive considering that figure is 25 times the company’s actual earnings.

The New York Post reported this morning that the $500 million stake was sold last month to a group of investors led by designer Tommy Hilfiger and a number rich people from his inner circle. The money will be used to expand the brand into Europe and Asia (emerging markets!) and to open more stores. There are currently 100 Michael Kors stores across America and Europe, and by next year the brand aims to double that number.

It’s all made even more remarkable when you remember that we’re in a recession, and that Kors only started devoting all his time and energy to the brand eight years ago. (Before that, he had been the women’s wear designer at Celine.) Still, financial experts say that even in an economic climate like the one we’re living in, luxury still means enough to demand high prices.

“This is luxury’s day,” said Richard Kestenbaum of New York investment bank Triangle Capital. Fears of a double-dip recession notwithstanding, demand for designer merchandise with fat price tags continues to climb, he said.

The company had more than doubled in size over the last four years, and it still has room to grow. Kestenbaum noted that “there are very few brands that are performing on the scale of Michael Kors, and that have as much room left to grow in different channels and parts of the world.”

And unless a competitor steps out soon, all those eager customers will be Kors’ for the taking.

[NYP]

Equity Stake Michael Kors Sale