Jimmy Choo sold for $1.5 billion

jimmychooMichael Kors has agreed to take over luxury retailer Jimmy Choo for STG896 million ($A1.5 billion).

Jimmy Choo, famous for its stiletto shoes and accessories, put itself up for sale in April as majority investor JAB increased its focus on consumer goods.

Under the terms of the deal, Michael Kors will pay 230 pence in cash for each Jimmy Choo share – a premium of 36.5 per cent to its share price before the sale process was announced.

Michael Kors, once the hottest name in affordable luxury, has been struggling in recent quarters with declining same-store sales as fewer people visit its shops.

It has been expanding into dresses and menswear and investing in its online business.

Pedro Aguilar Dominguez, personal accessories analyst at Euromonitor International, said that looking at the global landscape, retail sales of men’s designer footwear have grown marginally faster than women’s designer footwear over the last three years, according to the market research firm’s latest data.

“Women’s luxury footwear still generates almost twice the retail value of men’s luxury footwear, though, and that disparity is unlikely to narrow significantly over the next decade,” he said.

Dominguez also noted the impact of Brexit on Jimmy Choo’s share, after trading on the London Stock Exchange for a little over a year after the UK’s decision to exit the euro.

“Companies are struggling to understand what is going to happen and the financial repercussion of Brexit will be seen in the long term, it won’t take an immediate impact.

“For now, everything seems to be going well – with the brand outperforming its rivals and bucking the trend in China. But, Jimmy Choo needs to be careful not to get ahead of itself and learn from its competitors. Other British luxury brands such as Mulberry or Burberry have had a fluctuating performance, one year sales were soaring, the next they were dropping or showing a less positive growth.”

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