Yesterday Michael Kors Holdings Limited announced that it has reached an agreement to acquire Jimmy Choo PLC. Under the terms of the transaction, Jimmy Choo shareholders will receive 230 pence per share, with an enterprise value of approximately USD $1.350 billion. The transaction has been approved by the Boards of Directors of both Michael Kors and Jimmy Choo.
Is anyone else surprised by this news? What does this mean for Jimmy Choo?
John D. Idol, Chairman and Chief Executive Officer of Michael Kors, said “Pierre Denis will continue in his role as Chief Executive Officer of Jimmy Choo. He has led the company since 2012, during which time Jimmy Choo experienced compounded sales growth of 11% annually. Pierre brings more than 25 years of experience and a strong track record with global fashion luxury brands. Additionally, Creative Director Sandra Choi will continue to lead the creative and design teams at the company. Sandra has been with Jimmy Choo since its inception and has been the sole Creative Director since 2013. Her ground breaking vision and fashion artistry have created a truly iconic and internationally recognized luxury brand. Mr. Denis, Ms. Choi and the rest of the highly-talented management team have done a tremendous job, and this continuity of leadership will ensure that the DNA of Jimmy Choo is maintained as we work together to continue to grow the brand globally.”
The acquisition of Jimmy Choo is expected to deliver a number of benefits, including:
- The opportunity to grow Jimmy Choo sales to $1 billion
- A more balanced portfolio with greater product diversification
- An enhanced positioning in the attractive and growing luxury footwear segment
- The opportunity to grow in the men’s luxury footwear category
- Further expansion in the luxury accessories market
- Greater exposure to global markets, particularly the fast-growing market in Asia
- The potential to create long-term operational synergies
Michael Kors Holdings Limited believes that the acquisition enhances the company’s economic value and will drive improved long-term shareholder value. The acquisition is expected to be accretive on a GAAP basis in fiscal 2020.
One has to wonder how the Jimmy Choo customers are taking this news. I just hope the Jimmy Choo’s brand and their fashion designs are not compromised due to this acquisition.
For more information in regards to this acquisition click here.
About Michael Kors:
Michael Kors is a world-renowned, award-winning designer of luxury accessories and ready-to-wear. His namesake company, established in 1981, currently produces a range of products under Michael Kors Collection, MICHAEL Michael Kors and Michael Kors Mens, including accessories, ready-to-wear, footwear, wearable technology, watches, and a full line of fragrance products. Michael Kors stores are operated in the most prestigious cities in the world. In addition, Michael Kors operates digital flagships across North America, Europe and Asia, offering customers a seamless omni-channel experience. Michael Kors Holdings Limited is publicly listed on the New York Stock Exchange with the ticker KORS.
About Jimmy Choo:
Jimmy Choo encompasses a complete luxury accessories brand. Women’s shoes remain the core of the product offering, alongside handbags, small leather goods, scarves, sunglasses, eyewear, belts, fragrance and men’s shoes. CEO Pierre Denis and Creative Director Sandra Choi together share a vision to create one of the world’s most treasured luxury brands. Jimmy Choo has a global store network encompassing more than 150 stores and is present in the most prestigious department and specialty stores worldwide. Jimmy Choo PLC is publicly listed on the London Stock Exchange with the ticker CHOO.
Source: Jimmy Choo, Michael Kors