DealBook: Kors I.P.O. Makes Its Debut in Style

Richard Drew/Associated PressThe fashion designer Michael Kors and his mother in front of the New York Stock Exchange.

Michael Kors and his merry band of fashionistas brought a little glamor — and a big initial public offering — to the New York Stock Exchange on Thursday morning.

A flashy Michael Kors billboard was draped across the Corinthian columns on the N.Y.S.E. building’s facade. Down on the street, Mr. Kors and his proud mother, Joan Kors, posed for pictures, both sporting December tans, sunglasses and huge smiles. Inside, at 9:30 a.m., high above the trading floor, Mr. Kors rang the opening bell, high-fiving and hugging his chief executive, John Idol, and two fashion-tycoon backers, Lawrence Stroll and Silas K.F. Chou.

There was good reason to celebrate. In the face of a rocky stock market, the American fashion designer’s company had a successful initial public offering. It shares opened at $25 on Thursday morning, up 20 percent from their offering price of $20. The stock priced last night above its expected range of $17 to $19, and brought in $944 million for Mr. Kors and the other selling shareholders. The company itself did not raise any money in the I.P.O.

Mr. Kors sold about $117 million worth of stock on the deal, and maintains a roughly 8.6 percent stake that is worth some $400 million. The biggest winners are Mr. Stroll and Mr. Chou, who cashed in about $520 million worth of their holding company’s shares and still own about 35 percent of the business, a position worth about $1.7 billion.

At its current stock price, the company is worth about $4.6 billion.

In the DealBook article on Wednesday that previewed Kors’s offering, a retail-industry analyst raised several concerns about the I.P.O., including the question of whether Mr. Kors’s label would enter the fashion firmament or eventually fade. “Everyone wants to be the next Ralph Lauren,” the analyst said.

Because Mr. Kors has already sold so much of his business to outside investors, he will not be the next Ralph Lauren — at least in terms of his bank account. Unlike Mr. Kors, Mr. Lauren has retained control of his 44-year-old company through voting shares, and has rarely sold stock. Last year, Mr. Lauren sold nearly $1 billion worth of Ralph Lauren preferred shares, by far his largest cash-out ever. His ownership interest in the company, which has a market value of $12.5 billion, is worth more than $4 billion.

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