Karen Millen is aiming to double sales to £500m in the next five years after parent company Aurora Fashions revealed this week it will be spun off from the rest of the group.
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The growth is likely to come from further expansion into international markets, with China, Canada and Latin America all on the agenda. Further expansion is planned in European markets including Germany and Italy following its roll-out in France and Spain.
Karen Millen and Aurora - which operates Oasis, Coast and Warehouse - will both remain 90% owned by nationalised Icelandic bank Kaupthing, with the remainder held by management. But the spin-off will facilitate an eventual split when Kaupthing sells on its investments and Karen Millen is likely to end up in separate hands to the other Aurora brands.
Aurora finance director Richard Glanville said the move was designed to give Karen Millen the finance to expand globally with standalone stores, and additional debt facilities have been secured to fund its growth. From having sales of £80m with only 6% of them overseas in 2004, Karen Millen’s sales are now £250m with 60% of them abroad.
“With Karen Millen’s international success, its requirements for cash have been much higher than expected,” Glanville said. It is understood all the brands are trading well, despite the difficult market, and that the remaining Aurora brands will continue to grow internationally but through concessions, with Columbia, Peru, Argentina and Chile among the countries on the agenda for Oasis and Warehouse.
The new Karen Millen business will be chaired by Aurora executive chairman Derek Lovelock, with Gemma Metheringham and Steve Price as joint managing directors and Sanam Soufipour as finance director. Glanville and Aurora chief executive Mike Shearwood will remain on the board as investors but not be involved with the day-to-day running of Karen Millen.
It is understood there is no connection with the plans to sell All Saints by its Icelandic owners, which were revealed at the weekend. According to reports, Ernst & Young is handling the sale, which could value the business at £140m.