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Is anyone the right fit for Jimmy Choo?

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Is anyone the right fit for Jimmy Choo?

The high-end, footwear and baggage retailer Jimmy Choo, has notified the world that its business is up for sale.

This ‘for sale’ sign on the British-listed company will without a doubt, grab the attention of its luxury-goods rivals. But their sale strategy breaks the norm for a business sale.

The company has seen a number of shareholders since its birth in 1996 after starting out as a bespoke shoe making business in Britain. Its co-founding fashion designer Ms Tamara Mellon left the business in 2011. In 2017 the business has reportedly been valued at around £700 million.

Despite the vast ‘celebrity’ appearances the brand has made (ranging from the Duchess of Cambridge - Kate Middleton, to the Game of Thrones star Kit Harrington) and its increasing men’s range showing an increase in company revenue over the past few years the company’s profits have reportedly dwindled from 12% in 2014, to 7% in 2015 and 2% in 2016.

However, since this recent news, Jimmy Choo share prices have sky rocketed, reaching record highs. The company is reported to have said they are to “conduct a review of the various strategic options open to the company to maximise the value for its shareholders.” Nevermind further strategy, it would appear that simply by putting the business up for sale, publicity has increased its worth.

The company’s majority shareholder is JAB Luxury GmbH with approximately 67% ownership. JAB has the backing of the billionaire German family Reimann. JAB are said to be looking into the disposition of the company to focus on consumer goods, including food and beverages. JAB has acquired Krispy Kreme and is reportedly buying the Panera Bread bakery business. The alignment of synergies will clearly be effected by its current focus. So now would appear to be the best time to sell.

The company has said that no offers have yet been made, but is waiting. The certainty of whether a sale will go ahead is questionable. As above, the company has gone against the norm by publicising its sale. The general course of action would be through the use of a broker / brokerage firm acting as a middle man between the proposed buyer and seller, behind closed doors and out of the public eye until the sale is imminent. A broker will help find the best-suited buyer for the business, looking to get the best option for the company’s price tag.

Though Jimmy Choo have chosen a different strategy which has obviously helped the profitability for JAB through the increase in share price. Only time will tell if Jimmy Choo will in fact be sold.

In some circumstances all publicity is good publicity. But hopefully through this very open method of sale, the company has not ‘put its foot in it'.

For more on mergers, acquisitions and disposals or if you are thinking on embarking on the process yourself, please contact Thomas Baker in the corporate department for further information.