Hindustan Times (Gurugram)

Michael Kors to acquire luxury shoemaker Jimmy Choo for $1.2 bn

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LONDON: US retailer Michael Kors agreed to buy luxury shoemaker Jimmy Choo for $1.2 billion, snapping up a British company whose towering stilettos have been made famous by celebrity customers from Princess Diana to Kendall Jenner.

The move 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 at new markets and customer bases to boost flagging sales.

Founded by bespoke shoemaker Jimmy Choo in the 1990s, the company makes three quarters of its revenue from selling shoes and has about 150 company-operated retail stores around the world.

Its strong performanc­e stands in contrast to Kors, which has lost 65% of its market value since 2014 due to fierce competitio­n and a drop in customers at department stores.

Jimmy Choo will help Kors expand its footwear portfolio to 17% of total sales from 11%, Kors said on a conference call.

The shoemaker has the potential of raking in $1 billion in sales annually as it opens more stores in Asia, especially China, Kors Chief Executive John Idol said.

But the pace of store expansion will be measured, he said.

One of the reasons for falling demand for Kors bags was the fact that the company was expanding too fast, which made the brand too ubiquitous.

Kors will pay a premium of 36.5 percent to Jimmy Choo’s closing price before it was put up for sale.

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