Jones Group Inc. acquires Europe's largest luxury shoe retailer based in the United Kingdom

The Jones Group Inc. announced it has acquired Kurt Geiger, Europe’s largest luxury shoe retailer based in the United Kingdom, from Graphite Capital, a leading UK mid-market private equity firm.

The investment was for a cash consideration of approximately $350 million (or 215 million pounds Sterling) in cash, inclusive of debt acquired. The transaction, which was financed with cash on hand, is expected to be immediately accretive to earnings per share, exclusive of any required purchase accounting adjustments.

The Kurt Geiger acquisition positions Jones as one of the world’s most powerful portfolios of fashion footwear, immediately increasing its international penetration to just below 20 per cent of net revenues.

In addition, the acquisition further extends Jones' reach into the designer footwear business through Kurt Geiger’s portfolio of high-end brands and presence in leading department stores, such as Harrods and Selfridges. Kurt Geiger will serve as Jones' hub in Europe. Jones believes there are exciting opportunities to optimize the portfolios' existing and new brands.

The Company expects to achieve significant revenue synergies by leveraging the combined networks of partners, infrastructure and strong department store relationships to expand product distribution worldwide. On a trailing 12-month basis ended April 30, 2011, Kurt Geiger realized net revenues of approximately $332 million (or approximately 205 million pounds).
Wesley R. Card, The Jones Group Chief Executive Officer, noted that the transaction is about pursuing opportunities to optimize the company’s portfolio and establishing a strong foothold in Europe. The addition of Kurt Geiger to Jones is consistent with the company’s strategy of identifying companies with best-in-class talent and proven brands that have the potential for substantial growth, he stated.

Richard Dickson, The Jones Group President and Chief Executive Officer of Branded Businesses, stated that the company’s mission is to build the most powerful portfolio of brands in fashion. As part of its framework for growth, Jones is optimizing its existing portfolio and launching new brands to create value.

Kurt Geiger’s portfolio of premier footwear, exceptional brand management and best-in-class product expertise makes it an ideal complement to Jones’ business and long-term goals, said Dickson. By leveraging Jones’ deep retail networks worldwide, there is substantial opportunity to grow Jones' revenue base internationally and to introduce Kurt Geiger’s brands to the U.S, Dickson noted.

Kurt Geiger distributes owned brands, including Kurt Geiger, Carvela and KG, and licensed brands, including Nine West, French Connection and Lipsy, in 49 company-operated retail locations and department stores.

5th June 2011