KKR has agreed to buy a majority stake in SMCP Group of Paris. Financial terms were not announced. KKR will have about 65% of SMCP while management will retain 35%. SMCP is an apparel retailing group, that operates in the attractive affordable luxury apparel segment across four brands: Sandro, Sandro Men, Maje and Claudie Pierlot.
Kohlberg Kravis Roberts & Co. LP (together with its affiliates, “KKR”) and SMCP Group (Sandro, Maje and Claudie Pierlot) (“SMCP” or “the Company”), a leading ready-to-wear affordable luxury apparel retailer, today announced that KKR signed a definitive agreement with SMCP’s current shareholders to acquire a majority stake in the Company alongside its management team. KKR will own approximately 65% of the Company’s share capital with management retaining approximately 35%. The agreement remains subject to regulatory approvals and customary closing conditions.
“I have created this beautiful family history with my sister, Judith Milgrom, and I am pleased to embark on a new phase of our lives with KKR. Alongside Elie Kouby and Frédéric Biousse, Judith and I are reaffirming our full commitment to the business and have great ambitions for the group: building a global leader in the affordable luxury segment”, said Evelyne Chétrite, President of SMCP Group.
“We are excited to partner with KKR”, added Frédéric Biousse, the CEO of SMCP Group. “We are proud of the Company’s strong development over the recent years and would like to thank our shareholders L Capital and Florac for their support. We look forward to working with KKR as we accelerate the international expansion of our brands, particularly in the United States and Asia. KKR’s global presence and extensive experience and track-record in the international retail sector will be important assets in helping us continue our growth trajectory”.
Jacques Garaïalde, Partner and Managing Director in charge of KKR’s French operations, added, “SMCP is a remarkable business with an outstanding management team. The Company has developed strong French brands with international appeal, and high quality products at affordable prices that meet the needs of consumers around the world. We are pleased to support the team in their growth strategy”.
Over the past five years, the Company has experienced significant growth driven by a combination of like-for-like growth and new store openings across its four brands: Sandro, Sandro Men, Maje and Claudie Pierlot. Today, the Company has established a leading position in the French affordable luxury segment and a fast-growing international business with strong positions in Europe and a growing presence in the USA and more recently Asia. SMCP operates more than 570 points of sale, and generated a turnover of 350 million euros in 2012. Approximately 150 new store openings are planned for 2013, mainly outside France.
“We are delighted to have accompanied SMCP Group during the last couple of years of rapid development and we wish the managers, founders and KKR much success”, added Daniel Piette and Eduardo Velasco from L Capital and Léopold Meyer from Florac.
KKR was advised by Rothschild & Cie and SMCP Group was advised by J.P. Morgan and Leonardo & Co.
About SMCP Group
SMCP Group is a leading apparel retailing group, operating in the attractive affordable luxury apparel segment across four brands: Sandro, Sandro Men, Maje and Claudie Pierlot. Sandro and Maje were founded by Evelyne and Didier Chétrite and Judith Milgrom and Alain Moyal in the late 1980s and 1990s, respectively. In 2007, Evelyne and Judith were joined by Frédéric Biousse and Elie Kouby to accelerate the development of their brands. Claudie Pierlot was acquired in early 2009 and SMCP Group was subsequently created in 2010 upon an investment made by L Capital and Florac. SMCP Group developed a unique and effective business model: combining luxury codes (marketing & communication, shopping experience) with creative design content and high-quality fabrics while leveraging best practices from the fast fashion industry (short collection cycles and reactivity to market trends supported by an efficient supply chain). Having already opened 69 retail outlets in North America over the last 18 months, Sandro, Maje, and Claudie Pierlot also have five stores in Hong Kong and will open their two first stores in Shanghai in July, followed by four additional stores by the end of the year.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $75.5 billion in assets under management as of December 31st, 2012. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR & Co. L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR), and “KKR,” as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate.
L Capital: Eduardo Velasco, Philippe Franchet and Manal Saleh
Florac: Léopold Meyer, Olivier Golder and Gautier Preney
Buyers: Rothschild & Cie (Laurent Baril), Bredin Prat (Sébastien Prat), Simpson Thacher & Bartlett, Landwell, McKinsey, Roland Berger, Anne Beall, Deloitte.
Sellers: JP Morgan (Séverin Brizay), Leonardo & Co (Laurance Danon), The Financial Company of Edmond de Rothschild, SJ Berwin (Jérôme Jouhanneaud), DLA Piper (Michel Frieh), Shearman & Sterling (Guillaume Isaultier), KPMG (Axel Rebaudières and Vincent Delmas), Taj (Sophie Blegent-Delaphille), Oloyrn (Frédéric Jannin and Eric Lesieur).