ZEENAT MOORAD: If the Choo fits ...
Will Michael Kors take Jimmy Choo downmarket?
Michael Kors’ share price has lost one-fifth of its value this year, sales have stalled and forecasts have been downgraded as the mistake of chasing volume by opening too many shops has finally caught up. Now, the plan is to shut 125 of its 960 stores.
Jimmy Choo has found a new owner. Again. It’s the fifth time the London Stock Exchange-listed luxury shoe brand has changed hands since it was founded in 1996 by a Malaysian cobbler and a Vogue accessories editor. JAB Holdings, the investment arm of Germany’s buttoned-up billionaire Reimann family, has sold the brand to Michael Kors for US$1.4bn. That’s equal to about 17.5 times Jimmy Choo’s adjusted earnings before interest, tax, depreciation and amortisation for 2016. The firm (Jimmy Choo, that is) has a market cap of just under £890m. And now is a good time to sell. The shoemaker reported solid annual numbers earlier this year as a result of growth in Asia and a weak pound. Its share price has rebounded to trade at about 195p. Before this, it largely drifted around its floating price of 140p. The deal comes three months after JAB put Jimmy Choo up for sale. It has also hired Bank of America Merrill Lynch and Citi to look for a buyer for luxury footwear and accessories company Bal...
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