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August 16, 2011 7:42 pm

Tory Burch markets minority stake; could be planning IPO

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This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Tory Burch, the New York-based apparel company, is selling a minority stake, several people claiming knowledge of the situation told mergermarket.

Chris Burch, company co-founder and ex-husband of its namesake designer, has been shopping part or all of his stake in the New York-based women’s fashion company, said an industry banker. A second industry banker said Burch is divesting his entire stake in the company.

The move by Chris Burch, as well as the company’s reported search for a new COO and CFO, will pave the way for the company to IPO in 12-18 months, the two industry bankers said. Women’s Wear Daily recently reported the rumored executive hunt.

A spokesperson for the company denied it was considering an IPO, and declined to comment further.

J. Christopher Capital, Chris Burch’s venture capital firm, did not respond to multiple requests for comment.

Tory Burch earns annual EBITDA of around USD 120m, and the company is worth more than USD 1bn, as it is “easily a 10x multiple business,” said the second industry banker. A private equity source who claimed to know about the minority stake sale characterized the USD 1bn-plus valuation as unreasonably high.

A person claiming knowledge of the company’s strategy said he had been told that the sale process is proceeding slowly and no decisions have been made yet .

Chris Burch is working with a team of lawyers and has not appointed a bank, the first industry source added. The company may be looking for a bank to work with, however, the private equity source said.

Tory Burch designs and sells women’s clothing, footwear, and accessories through Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, among others.

In 2009, the company sold a minority stake, estimated to be 20% to 25%, to Tressalia Capital for at least USD 100m.

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