With Jimmy Choo, Michael Kors finds shoes to match its bags

China Daily (Hong Kong) - - TREND - COUR­TESY OF MOSCHINO; LOUIS VUIT­TON NORTH AMER­ICA, INC AND LOUIS VUIT­TON ORION PIC­TURES; ©BRUCE WE­BER / ©2017 CALVIN KLEIN

In a bid to bur­nish its brand im­age, US bag and ac­ces­sories maker Michael Kors is buy­ing lux­ury shoe­maker Jimmy Choo in a deal worth $1.35 bil­lion (896 mil­lion pounds).

Jimmy Choo, which counts Jen­nifer Lopez, Duchess of Cam­bridge Kate Mid­dle­ton and Bey­once among its fans, has a high-level pro­file that tempted Michael Kors to pay a pre­mium.

Share­hold­ers in Jimmy Choo will get 2.3 pounds ($2.95) in cash for each share, about 36.5 per­cent above the firm’s share price of 1.685 pounds on April 21.

Michael Kors has strug­gled re­cently, an­nounc­ing in May that it would close up to 125 stores due to weak sales.

It said that Jimmy Choo is “the ideal part­ner” and will have its on­line pres­ence bol­stered as a

We be­lieve the strate­gic steps Kors is mak­ing ... and ... the ad­di­tion of Jimmy Choo, an iconic pre­mium lux­ury brand, should be ben­e­fi­cial.” — An­a­lyst from Jef­feries

re­sult of the deal. Jimmy Choo CEO Pierre Den­nis and Cre­ative Direc­tor San­dra Choi will re­main in their jobs.

“Jimmy Choo is poised for mean­ing­ful growth in the fu­ture and we are com­mit­ted to sup­port­ing the strong brand eq­uity that Jimmy Choo has built,” said John Idol, CEO of Michael Kors.

An­a­lysts from re­search firm 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.

“We be­lieve the strate­gic steps Kors is mak­ing to el­e­vate its own brand are work­ing, and be­lieve the ad­di­tion of Jimmy Choo, an iconic pre­mium lux­ury brand, should be ben­e­fi­cial,” the an­a­lysts said in a note to clients.

Shares in Jimmy Choo were up 17 per­cent at 2.28 pounds last Tues­day, while Michael Kors was down 2.5 per­cent at $34.

Louis Gucci logo T-shirt.

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