UGG could become target for private equity buyers - footwearbiz: Leadi

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UGG could become target for private equity buyers

26/11/2012
Footwear brand UGG has been touted as a potential target for private equity firms after the maker of sheepskin boots was given the cheapest valuation of any US footwear and accessories maker larger than $1 billion by Bloomberg.

Warmer weather and higher sheepskin costs have lowered profits for its owner, Deckers Outdoor, which bought the brand in 1995. More than 87% of Deckers’ $1.38 billion revenue last year came from the UGG line.

 “The UGG brand is an attractive brand, and the company is undervalued relative to the strength of that brand,” Mitch Kummetz, an analyst at Robert W Baird & Co, told Bloomberg. “It could make sense for someone to come in and make an offer. I could see a strategic buyer being interested and I could see a financial buyer stepping up as well.”

Footwear brands have become attractive targets for buyout firms in recent months, with Apax Partners’ deal for Cole Haan and Evergreen Group’s purchase of wheeled brand Heelys among such deals.

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