Michael Kors To Buy Jimmy Choo

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Jimmy Choo is famed for glamorous heels

Michael Kors, which has tried to stem a decline in sales by expanding into dresses and menswear and its online business, said in May that sales at stores established for more than a year fell 14 percent in its fiscal fourth quarter. However, the chief executive of Jimmy Choo, John Idol, does not fear for the future of the label and believes there will be "meaningful growth in the future" under Kors' direction.

The British shoe brand is known for its stiletto heals and accessories and sells worldwide in cities from London to Paris, New York to Tokyo.

In May, Coach agreed to spend $2.4 billion buy high-end pursemaker rival Kate Spade. The brand became a big hit among musicians, actresses and royalty. The Kors brand helped further that trend by selling a good portion of its wares in department stores, which heavily discounted prices, making it hard to get customers to buy their products at full price.

Jimmy Choo has been one of the rare luxury success stories in recent years, increasing revenue 14.5% to $495 million and boosting annual earnings 15.7% in 2017.

"Last month Jimmy Choo said sales rose 1.6 per cent in 2016 once currency effects were excluded, with growth in China being offset by hard trading in the United States and Europe", says Financial Times. The company has 960 stores round the world. According to the data provider Dealogic, banks have made $957m from work in this sector year-to-date, a fall of more than 50% on this time last year.

Jimmy Choo's share price opened more than 16% higher in London on 25 July.

Jimmy Choo - whose celebrity fans include Beyonce, Lady Gaga, Nicole Kidman and Kate Middleton - is the "ideal partner" for the USA handbag and clothing maker, it said in a statement.

Jimmy Choo, which was founded in 1996 by former Vogue accessories editor Tamara Mellon and designer Jimmy Choo, put itself up for sale in April.

Jimmy Choo was listed in 2014 and its shares had gained 20 per cent this year.

Analysts from Jefferies said the deal could help Michael Kors rebuild its brand name, though that would happen in the longer-term and not have an immediate impact on the company's stock.

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