In response to decreasing sales and rising competition, Michael Kors announced on Tuesday that it has agreed to purchase shoe brand Jimmy Choo for USD 1.2 billion to enhance its presence and profits in the retail market.
In a statement, Michael Kors, Honorary Chairman and Chief Creative Officer of聽Michael Kors, said, 鈥淛immy Choo is a premier fashion luxury house that offers distinctive footwear, handbags and other accessories. We admire the glamorous style and trendsetting nature of聽Jimmy Choo聽designs. We look forward to welcoming聽Jimmy Choo聽to our luxury group.鈥�
This deal comes just months after Coach鈥檚 purchase of handbag brand Kate Spade for a reported USD 2.4 billion, and is expected to help Michael Kors compete with Coach and other luxury retail giants. Though Michael Kors is typically considered a middle-market brand that relies heavily on sales from outlets and department stores, Jimmy Choo鈥檚 reputation and positioning as a luxury shoe brand will enhance Michael Kors鈥� market position, overall competitiveness, and profits. It will also give the company access to Jimmy Choo鈥檚 consumer base, and is expected to boost Jimmy Choo鈥檚 sales to USD 1 billion.
Michael Kors also expects that the acquisition will give it greater access to the men鈥檚 luxury footwear category, and will allow it to continue its expansion in the luxury accessories market. Additionally, it will benefit from Jimmy Choo鈥檚 access to many fast-growing Asian markets, and gives both companies greater product diversification and a more balanced portfolio.
Said Pierre Denis, Chief Executive Officer of聽Jimmy Choo, said, 鈥淚t is a privilege for our management team to lead聽Jimmy Choo and to preside over such an exciting period for our company. We are convinced that there is so much more that can be delivered in the years ahead. We look forward to working closely with the leadership and team at聽Michael Kors Holdings Limited聽to further develop our iconic brand.鈥�
The deal has been approved by both boards of directors, and is scheduled to be finalized in the final quarter of this year. However, to become official it must first be approved by Jimmy Choo鈥檚 stakeholders, who make up about 75% of share capital.
In addition to this acquisition, Michael Kors announced in May that it will be closing up to 125 stores this year in order to refine its reach and improve its profit margins.
In addition to Jimmy Choo and Michael Kors, thousands of the world鈥檚 footwear and apparel companies can be in your contact list if you join 91制片厂 today. Whether you are looking for reliable suppliers, top manufacturers, wholesalers and potential customers in over 70 countries, or want to find out what your competitors are buying and which suppliers they鈥檙e using, 91制片厂 can help you reach out to sales prospects and decision-makers across the globe.
