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Steiner makes a strategic acquisition of Bliss from HOT

Here are the points from the just ended STNR conference call discussing the Bliss acquisition:

  • WIll help STNR growth their land-based spa and retail presence
  • Will allow them to cross market Bliss & Elemis brands
  • 7 licensed locations; 3 operated locations
  • 175 distribution outlets in the US and 110 distribution outlets internationally
  • Hope to close by year end
  • Bliss is more of an urban brand, so it's complementary to their "resort" presence
  • They cannot take the brand to non-Starwood hotels, but can take Bliss into their cruise ship channel and to stand-alone spas
  • Bliss South Beach and Hollywood, completed by year end
  • They can manage the spas at Starwood hotels, or Starwood can lease the spa's from them going forward
  • Think it will be $0.05 to $0.10 accretive in 2010, hope that they can use their NOL's that they have in the US
  • Not a competitive bid process
  • They will keep most of the Bliss team in house
  • Easy plug in brand for them
  • Cost/Revenue synergies baked into the accretion guidance?
    • Fairly minimal
    • Already started the IT and HR integration
  • Bliss: $85MM of TTM revenues and $5.3MM of TTM EBITDA (net of charges)
    • Distribution 28%, spa revenue 50%, direct retail 22%
    • Bliss margins (within 4 walls) are a little better then STNR's - especially in the way in which they manage their bookings
  • What about normalized EBITDA?
    • No comment, but normalized margins are more like low teens than 6% TTM
  • Will all the W hotels in Starwood's pipeline have a BLISS spa?
    • No
  • Aloft hotels also have Bliss products
  • Bliss customers are a little younger then the Elemis customers
  • Price positioning that allows them to take the product to cruise ships