Fashion group CBR woos investors with dividend pledge (updated)

Gerry Weber International AG

23/06/2015 10:14

* Price range set at between 14 and 18 euros 
    * Shares valued at up to 650 million euros 
    * Subscription period June 23-July 1 
    * Offering up to 19.4 mln shares 
 
 (Adds CEO comments, background) 
    FRANKFURT, June 23 (Reuters) - German women's fashion 
company CBR  EQTEC.UL , whose brands include Street One and 
Cecil, is aiming for a dividend payout ratio of 60 percent as it 
tries to attract investors for its  initial public offering. 
    CBR has just over 600 million euros ($675 million) in annual 
revenues from the sale of shirts, trousers and scarves of the 
Street One brand targeting younger women and of the Cecil brand 
with its focus on more mature women. 
    Shares are due to start trading on July 2 and the price 
range has been set at 14-18 euros. The company is targeting a 
dividend yield of 6.2 to 7.3 percent, Chief Executive Christoph 
Rosa said on a conference call on Tuesday.  
    That compares favourably with a dividend yield of 3.6 
percent at German rival Gerry Weber  GWIG.DE , 3.5 percent at 
Hugo Boss  BOSSn.DE  and 2.9 percent at H&M  HMb.ST , according 
to ThomsonReuters data. 
    CBR, owned by investment group EQT, said on Monday that it 
intends to sell 19.4 million shares, including an over-allotment 
option, giving its equity a value of up to 650 million 
euros. ID:L8N0Z83WF  
    The company is planning to sell new shares worth 200 
million, 90 percent of which will be used to reduce the 
company's debt by a third to 316 million euros. 
    EQT will sell shares worth up to 92 million euros. EQT, 
which bought CBR from buyout groups Apax and Cinven in 2007 in a 
1.5 billion euro deal, will see its stake decrease to 44-49 
percent in the share sale. 
    Including debt and if priced at the upper end of the range, 
the company will be valued at 965 million euros or roughly 9.5 
times its expected core earnings of about 102 million euros. 
That compares to a book value of 1.36 billion euros, according 
to the IPO prospectus. 
    Retail fashion companies such as H&M  HMb.ST , Inditex 
 ITX.MC , Next  NXT.L , Marks and Spencer  MKS.L , Fast 
Retailing  9983.T  and Esprit  0330.HK  trade at an average of 
11 times their expected core earnings. 
    The company's margin tops that of peers such as Tom Tailor 
 TTIGn.DE , Gerry Weber and Esprit  0330.HK , among others, 
because its wholesale focus means it needs very low levels of 
working capital.  
    Wholesale activities account for 85 percent of revenues, 
while ecommerce and retail sales through its own shops account 
for the rest. 
 ($1 = 0.8888 euros) 
 
 (Reporting by Kirsti Knolle and Andreas Cremer; Editing by 
Keith Weir) 
 ((Andreas.Cremer@thomsonreuters.com; +49-30-2888-5084; Reuters 
Messaging: andreas.cremer.thomsonreuters.com@reuters.net)) 
 
Keywords: CBR HOLDG IPO/