Michael Kors confirms acquisition of Jimmy Choo

Jimmy Choo fall 2017 ad campaign

Jimmy Choo fall 2017 ad campaign

USA 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.

Tamara Mellon and Jimmy Choo the Malaysian cobbler founded the shoemaker in 1996. A July 15 report from Australia's Sky News said that Michael Kors was competing with a Chinese private equity firm called Hony Capital and European-based CVC Capital Partners to buy Jimmy Choo.

The 230 pence represents a 36.5% premium to the close price of 168.5 pence on April 21, the day before JAB Luxury started a formal sale process for Jimmy Choo. But JAB is a privately-held business group, and has built its brand portfolio around coffee and food companies rather than luxury accessories; it owns American coffee giants like Peet's Coffee & Tea, Caribou Coffee, and Keurig Green Mountain, and recently purchased Panera Bread Co.

Michael Kors has been expanding into menswear and investing into online sales after a hard trading period.

Goldman Sachs bankers David Friedland, Jennifer Davis and Nick Harper are working as lead financial advisers to Michael Kors on the acquisition, with JPMorgan's Nikolas Johnston, Lorenzo Colonna di Paliano, Dwayne Lysaght and Adam Laursen also involved.

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The Michael Kors brand of purses, clothes and accessories is typically sold in malls and department stores, which have been in decline due to changing shopping habits.

The merger is expected to boost Jimmy Choo sales to $1bn, as well as create an as yet uncalculated quantity of "long-term operational synergies", according to the press release.

Kors, though, is hoping to use its own massive global infrastructure to expand Jimmy Choo's footprint.

Jimmy Choo, known for its stiletto heels and handbags, will remain under its existing management team, including its chief executive, Pierre Denis. The brand runs about 150 company-operated retail stores, 560 multi-brand doors and more than 60 franchise stores in premier locations worldwide, according to Michael Kors' announcement.

So buying a prestigious shoe and handbag brand like Jimmy Choo might fit into Michael Kors's plan for the luxury market.

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