luxury retail

Ares Management and Canada Pension Plan Investment Board (CPPIB) have entered into an agreement to acquire Neiman Marcus Group from a group of investors led by TPG and Warburg Pincus for a purchase price of $6 billion. The company’s management will retain a minority stake. The transaction is expected to close in the fourth quarter of 2013.

“We are delighted to join with CPPIB as a long-term investor in Neiman Marcus Group, a leading luxury retailer with global brand recognition that attracts shoppers from all over the world. We share a common vision with the company’s management team, led by its highly respected Chief Executive Officer Karen Katz, and together, we plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail,” said David Kaplan, Senior Partner and Co-Head of the Private Equity Group of Ares.

Neiman Marcus Group is one of the largest US luxury retailers, comprised of 79 stores totaling more than 6.5 million gross square feet. The company operates 41 Neiman Marcus Stores, two Bergdorf Goodman locations in Manhattan and 36 Last Call outlet centers. Its online retailing division operates under the Neiman Marcus, Bergdorf Goodman, Last Call and Horchow brand names.  Neiman Marcus is based in Dallas (www.neimanmarcusgroup.com).

“This is an excellent opportunity to invest in a leading omni-channel luxury retailer, operating two of the most iconic retail brands in the US,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “We believe the company’s strong market position, combined with an expected increase in US luxury goods spending, provide attractive opportunities for future growth. We are excited to partner once again with Ares, a like-minded, long-term partner of ours.”

Credit Suisse acted as financial advisor to Neiman Marcus Group, and RBC Capital Markets and Deutsche Bank Securities acted as financial advisors to Ares and CPPIB, all of which provided committed debt financing in connection with the transaction.

Ares Management has $66 billion in capital under management and invests in private equity, leveraged loans, high-yield bonds, distressed debt and private debt. The firm has approximately 700 employees and is headquartered in Los Angeles with offices in New York, London, Chicago, and Atlanta (www.aresmgmt.com).

The Canada Pension Plan Investment Board (CPPIB) invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. The board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. The CPPIB is headquartered in Toronto, with offices in London and Hong Kong (www.cppib.ca).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-10-13

Kohlberg Kravis Roberts & Co. has signed an agreement to acquire Sandro, Maje and Claudie Pierlot (SMCP), a luxury apparel retailer, from L Capital and Florac, which originally acquired the company in November 2010. KKR will own approximately 65% of the company with management retaining approximately 35%.

“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,” said Jacques Garaïalde, Partner and Managing Director in charge of KKR’s French operations.

SMCP Group is an apparel retailing group operating in the affordable luxury apparel segment. Products are sold under four brands: Sandro, Sandro Men, Maje and Claudie Pierlot. The company operates 570 stores in Europe, the US and Asia. Approximately 150 new store openings are planned for 2013, mainly outside France. Total revenues for 2012 were €350 million. The company is based in Paris (www.sandro-paris.com) (www.maje-paris.com).

“We are excited to partner with KKR”, said 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”.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $66 billion in assets under management. In addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

“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”, said Daniel Piette and Eduardo Velasco from L Capital and Léopold Meyer from Florac.

L Capital is sponsored by the LVMH Group and Groupe Arnault. Sectors of interest include personal care and well-being, personal equipment, home & family equipment, and selective retailing. The firm was founded in 2001 and is headquartered in Paris with additional offices in Milan and Madrid (www.lcapital.eu).
Florac is an investment fund created and managed by Marie-Jeanne Meyer, shareholder and former managing director of the Louis Dreyfus Group. The firm was founded in 2009 and is based in Paris (www.florac.eu).

KKR was advised by Rothschild & Cie and SMCP was advised by J.P. Morgan and Leonardo & Co.

© 2013 PEPD • Private Equity’s Leading News Magazine • 4-19-13