Shoemaker Cole Haan preps IPO as athleisure focus boosts sales

Bloomberg

Premium shoemaker Cole Haan, currently owned by private equity, is preparing for an initial public offering, following robust sales and profit growth.
“Our management team is confident in the opportunities we have created for the Cole Haan brand and our business globally,” Chief Executive Officer Jack Boys said in a statement. “Based on the momentum we have generated in the business and the opportunities we believe are before Cole Haan, we have determined that now is the time to prepare for an initial public offering of the company’s shares.”
The company is in the process of starting discussions with investment banks, according to a person with knowledge of the results who isn’t authorised to speak publicly. Timing of a possible offering wasn’t disclosed.
Cole Haan, acquired in 2013 by private equity firm Apax Partners from Nike Inc, boosted revenue 14 percent to $687 million in the fiscal year that ended on June 1, the person said. Adjusted earnings before interest, taxes, depreciation and amortisation jumped 56 percent to $95.3 million.
The move marks quite a turn for the brand Nike sold for $570 million more than six years ago. At the time, Cole Haan, built on dress shoes, appeared on the outs as consumers shifted to comfort and casual footwear. The brand’s growth had slowed, with annual sales at the time gaining just
2.7 percent to $535 million. Then shortly after going private, the “athleisure” trend took hold as spandex and sneakers encroached further into everyday life.
After separating from Nike, the new standalone company quickly realised that it needed to push its dress shoes towards a sportier aesthetic. It helped that two veterans of the sneaker world led the charge. Boys ran Converse, another Nike brand, as CEO for about a decade before leading a bid for Cole Haan. And David Maddocks, who worked under him at the maker of Chuck Taylors, joined as chief marketing officer.
Cole Haan invested heavily in research and development, and in 2014 launched ZeroGrand, a lightweight shoe line that married dressy uppers with athletic bottoms to add more cushion and flexibility. Early offerings included a $278 ankle-high Chukka boot, and from there the company expanded it to sneakers and women’s shoes.
Boys also pursued growth by expanding further overseas, including a push into the UK and the Middle East, and now the company now sells goods in more than 60 countries.
Cole Haan has 112 stores in the US and Canada, 80 in Japan and 176 in foreign markets run by distributors.
But there have been speed bumps. Revenue has stalled at times, including in fiscal 2018 when the company closed some stores in an effort to protect profits, according to a Moody’s report from January.