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
