Michael Kors has announced that it will be acquiring luxury shoe brand Jimmy Choo for $1.2 billion.
According to an article on Reuters, Michael Kors has announced that it will be acquiring luxury shoe brand Jimmy Choo for £896 million, or $1.2 billion. The news comes just a couple of months after Coach bought Kate Spade, which was first rumored to be buying the brand.
Michael Kors released a statement saying, “Jimmy Choo is an iconic premier luxury brand that offers distinctive footwear, handbags and other accessories. We admire the glamorous style and trend-setting nature of Jimmy Choo designs.”
Jimmy Choo began about 20 years ago in London. The brand became very popular thanks to celebrities and the red carpet. The brand had been acquired by private companies three times before becoming the first luxury shoe brand to go public 3 years ago.
Michael Kors CEO John D. Idol confirmed that Jimmy Choo CEO Pierre Denis will stay with the brand as well as creative director Sandra Choi saying, “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.”
Earlier this year in May, rumors began circulating that Coach would offer a bid to buy Jimmy Choo. The brand was said to be worth more than $1.3 billion.
In January, both Coach and Michael Kors were said to be interested in acquiring Kate Spade. A couple of months later Coach was rumored to be announcing the acquisition of the brand, however, no announcement was made. In May, however, the brand announced the acquisition of Kate Spade for $2.4 billion.
Affordable brands have been buying luxury brands to increase sales and profits. Jimmy Choo has done well but Michael Kors has not. Last month, the brand announced it would close up to 125 stores within the next two years. The brand also said sales declined by 14.1% in the fourth fiscal quarter 2016. Acquiring Jimmy Choo would probably make sales and profits increase at the brand.
So, what do you think? Will Michael Kors’ sales and profits increase? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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