US retailer Michael Kors has agreed to buy luxury shoemaker Jimmy Choo for $1.2 billion, snapping up the British company famous for its towering stilettos worn by celebrity customers ranging from Princess Diana to Kendall Jenner.
The purchase of the London-listed Jimmy Choo was assisted by the drop in the UK pound — down more than 10 percent against the US dollar since the June 2016 Brexit vote.
Even so, independent retail analyst Richard Hyman told Arab News that the “very high price” Michael Kors paid “requires significant growth (in Jimmy Choo). And the Middle East is critical.
“If you look at Western countries, economies are pretty static at best, and retail is over supplied in every segment. The Middle East and Far East will be key for them to justify the acquisition.”
Hyman added, “There is much more to the Middle East than simply the Dubai Mall. Joint ventures and franchise deals will be the key routes and it’s all about finding the right local partners.”
This approach seems to be already on the company’s mind, with the Jimmy Choo 2016 annual report confirming it is “planning joint ventures in South Korea and in the UAE.”
The Kors-Choo deal comes two months after rival handbag maker Coach struck a deal to buy quirky fashion brand Kate Spade & Co, as so-called affordable luxury companies look to go into new markets to try to boost flagging sales, according to Reuters.
“Jimmy Choo is an iconic premier luxury brand that offers distinctive footwear, handbags and other accessories,” said Michael Kors, honorary chairman and chief creative officer.
“We admire the glamorous style and trend-setting nature of Jimmy Choo designs.”
Founded by bespoke shoemaker Jimmy Choo in the east end of London in the 1990s, Jimmy Choo Plc listed at 140 pence in 2014 and will sell out at 230 pence.
source:Arab News