Fashion mega brand Koors has announced an agreement to purchase luxury cobbler, Jimmy Choo. Born from humble beginnings in London, the iconic shoe brand has been through three private equity owners since its founding, the latest being the billionaire Reimann family from Germany.
The deal is worth 896 million pounds, approx 1.2b dollars, a 36.5% premium on the current share price. Jimmy Choo rose to prominence in the late 90's but has struggled to keep its place in a market moving away from retail and overpriced luxury. Choo's woes are not unique to them, as retailers the world over struggle against failing shopping malls and a client base which is far happier buying things online.
In fact, in another notable fashion acquisition, Coach recently acquired Kate Spade, which seemed to bolster trading for both firms. Look to see more of these retail M/A situations as businesses which have overcome the "internet hump" look to acquire those who haven't, eliminating competition and broadening their footprint.
It is also important to remember that quality and design often go through changes and slumps when a new sheriff moves in. Koors has said they will "keep the existing management structure of Jimmy Choo once the deal completes, with Pierre Denis staying on as chief executive."
Peter Hard, chairmen of the London shoemaker said, “A combination with Michael Kors will allow Jimmy Choo to embark on its next phase of growth and provide opportunities for the benefit of Jimmy Choo customers, employees, shareholders and other stakeholders.”
More if it develops
Source: FT