Karen Millen Holdings Ltd
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PROSPECTUS Listing on ICEX Main List Public share offering ISK 1,233 million 90,661,831 shares ISK 13.6 per share JUNE 2005 Mosaic Fashions TABLE OF CONTENTS Prospectus June 2005 I STATEMENTS AND NOTICE................................................................................................................................. 2 Issuer’s Statement..................................................................................................................................................... 2 Manager’s Statement................................................................................................................................................. 2 Auditors’ Statements .................................................................................................................................................. 3 References and Glossary of Terms and Abbreviations .................................................................................................. 4 Publication Calendar of Accounts ................................................................................................................................ 4 Notice to Investors ..................................................................................................................................................... 5 II OFFERING AND LISTING OF SHARES.................................................................................................................. 6 III SHARE CAPITAL AND OWNERSHIP.....................................................................................................................11 Total Share Capital ...................................................................................................................................................11 Issue and Share Rights .............................................................................................................................................13 Ownership................................................................................................................................................................14 IV HISTORY .............................................................................................................................................................16 Overview..................................................................................................................................................................16 History of Mosaic Fashions hf. and Predecessors ........................................................................................................17 V ACQUISITIONS AND DIVESTMENTS ....................................................................................................................18 VI ORGANISATION...................................................................................................................................................19 Legal Structure.........................................................................................................................................................19 Organisational Structure ............................................................................................................................................21 VII FASHION RETAIL................................................................................................................................................26 The Fashion Retail Market .........................................................................................................................................26 Mosaic Fashions' Brands ...........................................................................................................................................26 Portfolio of Recognised Brands ..................................................................................................................................34 VIII OPERATIONS......................................................................................................................................................37 IX FINANCIAL HIGHLIGHTS......................................................................................................................................42 Pro Forma Accounts Compiled from the Statutory Accounts .........................................................................................44 Pro Forma Balance Sheet..........................................................................................................................................50 Mosaic Fashions hf., (the parent company) balance sheet as of 20 May 2005 ................................................................52 X RISK FACTORS ...................................................................................................................................................53 APPENDICES A Mosaic Fashions hf. - Articles of Association B Summary of certain Icelandic and UK tax rules C Mosaic Fashions Ltd. - Financial Statements for the year ended 29 January 2005 D Mosaic Fashions Ltd. - Financial Statements for the year ended 31 January 2004 E Mosaic Fashions hf. (parent company) – Balance Sheet as of 20 May 2005 F Sierra Holdings Ltd. – Financial Statements for the year ended 31 January 2004 G Sierra Holdings Ltd. – Financial Statements for the year ended 25 January 2003 H Karen Millen Holdings Ltd. – Financial Statements for the period ended 1 February 2004 I Karen Millen Holdings Ltd. - Financial Statements for the period ended 2 February 2003 J Whistles Ltd. - Financial Statements for the period ended 2 February 2003 K Reconciliation and details of the pro forma profit and loss account information to the statutory accounts 1 I STATEMENTS AND NOTICE Issuer’s Statement The Board of Directors of Mosaic Fashions hf., ID-No. 550405-0320, Sudurlandsbraut 4, 108 Reykjavík, Iceland, hereby declares that, to the best of its knowledge, the information in this Prospectus both accords fully with the facts and no important items have been omitted which could affect evaluation of the Issuer or its shares. London, 30 May 2005 On behalf of the Board of Directors of Mosaic Fashions hf. Derek Lovelock, CEO Stewart Binnie, Chairman of the Board Icelandic ID-No. 010150-2569 Icelandic ID-No. 030646-2749 Manager’s Statement Kaupthing Bank hf. – Investment Banking, ID-No. 560882-0419, Borgartún 19, 105 Reykjavík, Iceland, hereby declares that in preparing this Prospectus it has gathered the data which in its estimation was necessary to provide a true and fair picture of Mosaic Fashions hf. and its shares. To the best of our knowledge no important items have been omitted which could effect the evaluation of the Issuer or the shares for which listing is sought. Reykjavík, 30 May 2005 On behalf of Kaupthing Bank hf. – Investment Banking Örvar Kærnested, Managing Director, Investment Banking Division ID–No. 130776-4429 Mosaic Fashions Prospectus June 2005 2 Auditors’ Statements KPMG Endurskodun hf., reg. no. 590975-0449, Borgartún 27, 105 Reykjavík, has reviewed the Balance Sheet for Mosaic Fashions hf., the parent company, as of 20 May 2005. KPMG Endurskodun hf. has also conducted certain procedures (described on page 49) on the pro forma Consolidated Balance Sheet of Mosaic Fashions hf. prepared by the management of the Company as set out in this Prospectus on page 50-51. We confirm that the information in this Prospectus regarding the abovementioned Balance Sheet for Mosaic Fashions hf. as of 20 May 2005 and the pro forma Balance Sheet on page 51 are consistent with the abovementioned Balance Sheets of Mosaic Fashions hf. Mosaic Fashions Prospectus June 2005 Reykjavík, 30 May 2005 On behalf of KPMG Endurskodun hf. Sigurdur Jónsson, state authorised public accountant ID–No. 290256-5269 KPMG Audit Plc, 8 Salisbury Square, London, EC4Y 8BB, United Kingdom, has, in accordance with Auditing Standards issued by the Auditing Practices Board in the United Kingdom, audited the financial statements of Mosaic Fashions Ltd. (formerly Noel Ltd.) for the 52 weeks ended 29 January 2005 and the period from incorporation on 19 August 2003 to 31 January 2004. Our unqualified audit reports were addressed to the members as a body of Mosaic Fashions Ltd. at the dates of their issue, being 6 April 2005 and 28 April 2004 respectively, and are reproduced in full in Appendixes C and D. Our reports stated (in summary) that, in our opinion, the abovementioned financial statements gave a true and fair view of the state of affairs of Mosaic Fashions Ltd. (formerly Noel Ltd.) and its group as at 29 January 2005 and 31 January 2004 respectively and of the profit of the group of companies headed by Mosaic Fashions for the periods then ended, and were properly prepared in accordance with the UK Companies Act 1985. We confirm that the information in this Prospectus regarding the abovementioned financial statements is consistent with the financial statements that we have audited and reported on in accordance with section 235 of the UK Companies Act 1985. KPMG Audit Plc has conducted certain procedures described on page 42 of this Prospectus with regard to the pro forma profit and loss accounts, which have been prepared by the Directors of the Company, for the last three financial years, ending on 25 January 2003, 31 January 2004 and 29 January 2005 respectively and are presented on page 43 to 46 of this Prospectus. We confirm that the information in this Prospectus regarding the abovementioned pro forma profit and loss accounts is consistent