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- 15 Jun 2010
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Ralph Lauren Sells Shares but Retains Control

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One of the world’s most iconic luxury leaders is selling about a quarter of his Class B voting shares, but certainly not letting go of the reins.

Ralph Lauren is an expert at projecting the sort of charmed image which his preppy, all-American brand epitomises. And his current financial plans are set to make that life even more charmed, netting the 70 year old luxury icon almost $900 million. Not that Lauren is in need of extra cash- Forbes’ latest billionaires list valued Lauren at an estimated $4.6 billion.

In a deal being overseen by JP Morgan and Goldman Sachs with Deutsche Bank Securities and UBS Investment Bank as co-managers, the founder, chairman and CEO of Polo Ralph Lauren Corp. is selling about a quarter of his Class B voting shares for the eye-watering sum, while retaining about 93.5% of the voting stock.
In addition to the public offering, Polo will purchase 1 million shares from Lauren at the same price as the public offering, the maximum price of which was listed as $78.55.

Polo shares closed on Monday at $84.17, up 72 cents, or 0.9 percent. That price puts the value of the 2.4 million Class A shares Lauren currently owns at $202.9 million, but the 39.8 million Class B shares, calculated at the same price, are worth $3.35 billion.

The company are keen to stress that the deal is a necessary part of Lauren’s “asset diversification plan”, and that his role as chairman and CEO will be unaffected. Indeed, the total combined voting power of Lauren and his family following the sales would be 80.1 percent.

The luxury veteran has recently transferred many responsibilities to Roger Farah, president and CEO since April 2000, but Lauren remains completely engaged with virtually ever area of the business.

And business has been good in recent times. In April, Ralph Lauren made its biggest mark yet in Europe with the opening of a 23,000 square foot flagship in a 17th century townhouse on Paris’ Left Bank. Last month, they reported fourth-quarter profits that were about two-and-a-half times up on the year before, and a 9.2 % increase in revenues to $1.34 billion.

With over $1.2 billion in cash and investments, the company now plans to continue to engage in stock buybacks and debt reduction while driving international retail and e-commerce sales.

Speaking to the press Lauren sounded justifiably proud of his achievements: “We successfully took control of our Asian operations, we made great strides in the development of our accessories products and we opened several luxury stores in key global markets.”

Life is good for Mr Lauren.

Sources
WWD