Michael Kors to buy Jimmy Choo for £896m
Fashion brand Micheal Kors has agreed to buy Jimmy Choo for £896m.
FTSE All-Share
4,423.59
17:14 26/04/24
FTSE Small Cap
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16:59 26/04/24
Jimmy Choo
230.00p
16:30 30/10/17
Personal Goods
16,042.55
16:59 26/04/24
Under the terms of the deal, Jimmy Choo shareholders will receive 230p per share, with an enterprise value of around $1.35bn.
The transaction, which has been approved by the boards of directors of both companies, is expected to give Jimmy Choo the opportunity to grow sales to $1bn and allow for a more balanced portfolio with greater diversification.
John D. Idol, chairman and chief executive officer of Michael Kors, said: “We are pleased to announce the acquisition of Jimmy Choo, an iconic brand with a rich history as a leading global luxury house. Jimmy Choo is known worldwide for its glamorous and fashion-forward footwear. The company is a leader in setting fashion trends. Its innovative designs and exceptional craftsmanship resonate with trendsetters globally. We believe that Jimmy Choo is poised for meaningful growth in the future and our company is committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years.”
Current chief executive Pierre Denis will stay on in his role at Jimmy Choo and Sandra Choi will remain in the post of creative director.
Denis said: "It is a privilege for our management team to lead 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 Michael Kors Holdings Limited to further develop our iconic brand. Our two companies share the same vision of style and trend leadership. Our luxury heritage is the foundation of Jimmy Choo and we will continue to bring our brand vision to consumers globally.”
Atif Latif, director of trading at Guardian Stockbrokers, pointed out that Jimmy Choo has been on the M&A radar for quite a while linked to names such as Coach and private equity houses since it put itself up for sale in April
"We see the rationale of Kors being able to increase the profitability of Jimmy Choo and the fit makes strategic sense in the current climate and to grow other areas such as accessories as well as shoes where UK and European demand for luxury goods has started to weaken given the poor outlook for consumer spending, opposite to the market in Asia. With a float price of £1.70 versus the current takeout price investors should be pleased at the price given the future outlook."
At 0907 BST, Jimmy Choo shares were up 17% at 228.25p.