NEW YORK, United States — Michael Kors Holdings Ltd., a maker of designer clothing and handbags, will hold a secondary offering of 11.6 million shares to let the company’s biggest shareholder sell its stake.
Michael Kors Holdings won’t receive any proceeds from the stock sale, which will be managed by JPMorgan Chase & Co., according to a statement today. The shares in the offering represents the entire holdings of Sportswear Holdings Ltd., a founding investor in the company that owned a 5.7 percent stake. Sportswear Holdings’ representatives on the board, Lawrence Stroll and Silas Chou, also will step down.
The move follows an almost fourfold gain in the stock since Michael Kors held its initial public offering in 2011. In recent months, concerns about shrinking profit margins have weighed on the shares. Chief Executive Officer John Idol also made a failed experiment to introduce fall products earlier in the year, hampering results.
Michael Kors fell as much as 4.3 percent to $76.50 in late trading after announcing that Sportswear Holdings was exiting its stake. The shares had declined 1.5 percent this year through today’s close.
The Hong Kong-based company signalled last month that its gross margin will be about 60.4 percent in the current year, compared with 60.9 percent a year ago.
Sportswear Holdings, which has been selling shares since 2011, will maintain ties with the company through its ownership in Michael Kors Far East Holdings Ltd., Idol said today. The board departures will leave the company with seven directors.
“We believe we have a bright future ahead with continued opportunity for growth,” he said.
By Nick Turner; editor: James Callan.