Michael Kors set to buy Jimmy Choo in $1.2 billion deal

by BobbyT 0

Michael Kors

On Tuesday, Michael Kors Holdings said it had agreed to buy the shoe company Jimmy Choo for 896 million pounds, or about $1.2 billion, the latest push by an American high-end fashion house to find new sources of growth and what its chief executive characterized as the first step in building a bigger international luxury group.

Jimmy Choo, which shot to prominence thanks to celebrity patrons like Princess Diana and the “Sex and the City” star Sarah Jessica Parker, could give Michael Kors a new avenue for growth.

“Acquiring Jimmy Choo is the beginning of a strategy that we have for building a luxury group that really is focused on international fashion brands,” John D. Idol, the chairman and chief executive of Michael Kors Holdings, said in an interview.

Mr. Idol said he was targeting more acquisitions, focusing on luxury companies that “lead in style and trend” but also “have got some size and scale” as well as “some heritage.”

Though both Michael Kors and Jimmy Choo are red-carpet favorites, they appeal to different segments of the population.

Michael Kors, known for fashion-forward designs and competitive prices, is heavily reliant on outlets and department stores, where deep discounting is common. Leather purses sell for as little as $70 and handbags are available for $95.

Jimmy Choo occupies a higher price point: Open-toe slip-on sandals sell for $425, while crystal-encrusted shoes with the brand’s signature sky-high stilettos go for nearly $3,000. The brand brings not only a different range of customers, but also hefty profit margins and an upmarket aura.

The deal for Jimmy Choo came just months after Coach agreed to a $2.4-billion deal to buy the American handbag and accessories brand Kate Spade, apparently hoping that the combination of two affordable luxury brands could help it carve out new territory in a crowded market. Coach acquired its own upmarket shoemaker, Stuart Weitzman, in 2015.


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