Monday, 29 September 2014

Jimmy Choo, Luxury Shoe Brand, to List Shares in London

LONDON — The luxury shoe company Jimmy Choo, which shot to fame on the feet of the stars of “Sex and the City,” said on Tuesday that it planned to pursue an initial public offering later this year in London.

The British shoe brand is expected to sell at least a 25 percent stake of its new holding company, Jimmy Choo Limited, in an offering that could value the company at about 700 million pounds, or about $1.1 billion. The listing is expected in October.

Jimmy Choo would become the first publicly traded, stand-alone luxury footwear brand, and the announcement is sure to reverberate through the fashion world and Wall Street.

It is final proof, if any were needed after the current round of fashion shows in New York, London and Milan, that the age of the “it” bag is over, and the era of the shoe is well underway.
The shoe segment is made up of low-hanging fruit for the deal world: small and medium-size independent names, most still owned by the individual or family who founded them, like Manolo Blahnik, Christian Louboutin, Giuseppe Zanotti, Rene Caovilla, Casadei and Santoni.

​Last year LVMH Moët Hennessy Louis Vuitton, the French luxury giant, bought the British shoe brand Nicholas Kirkwood, LVMH’s first-ever stand-alone shoe brand, as if in acknowledgement of the trend. Its rival Kering, previously known as Pinault-Printemps-Redoute, owns Sergio Rossi.

Jimmy Choo stands out for a canny product mix that balances out-there stilettos, platforms and other statement-making shoes for women with a basics line called 24:7. Prices range from $525 for flat shoes to $1,795 for thigh boots on Net-a-Porter, the online luxury retailer.

Jimmy Choo also sells a range of accessories under its brand name, including handbags, belts and fragrances, as well as men’s shoes.

The company directly competes with other high-end women’s shoemakers, most notably Christian Louboutin, whose shoes are known for their distinctive red sole.

The brand was founded in 1996 by the shoemaker Jimmy Choo, who was making bespoke shoes in London’s East End, and Tamara Mellon, Vogue’s former accessories director. Mr. Choo’s niece Sandra Choi joined the company as creative director.

Mr. Choo and Ms. Mellon have left the company, but Ms. Choi remains as creative director.

The company expanded to the United States with a boutique in New York in 1998 and now has about 170 stores in 34 countries.

“Jimmy Choo is a clear success story with strong momentum, and I am confident that our future as a public company can only extend our reputation and position in this attractive sector,” Pierre Denis, the Jimmy Choo chief executive, said in a news release.

The offering is expected to include a partial sale of the holdings of Joh. A. Benckiser’s JAB Luxury arm, which owns the brand.

The company posted sales of £281.5 million in 2013 and plans to open 10 to 15 stores a year as part of its growth strategy. The company posted adjusted net income of £21 million last year.

China is expected to be an important growth market for the company, Mr. Denis said in an interview.

The company, which had nine stores in Asia at the end of 2013, expects to open five stores a year in China over the next five years, Mr. Denis said. Triple-digit sales growth in China has been driven in part by the brand’s appearance on television shows, including the Korean serial “Love from the Star.”

In a report last year, the consulting firm Bain & Company said that Chinese buyers were on their way to accounting for about a third of all luxury good purchases worldwide.

Jimmy Choo said that luxury shoes remained “one of the fastest growing segments in the wider luxury market” and represented an entry point for many buyers of luxury goods.

Luxury shoe makers also have benefited from an increased demand for their footwear by retailers, namely higher-end department stores, and an increasing market for men’s shoes, Jimmy Choo said.

Jimmy Choo expects online sales also to be a driver for its business in the medium term.

For the first half of 2014, Jimmy Choo said that its revenue rose 9.4 percent to £150.2 million, excluding the impact of currency changes.

The listing speaks to both the rising popularity of accessories among luxury consumers, and the increasing strength of the footwear market compared with other apparel segments.

In the last few years, department stores have devoted a significant portion of their shop floors to their shoe sections, such as a 63,000-square-foot area at Macy’s in New York, 42,000 square feet at Harrods in London, and 30,000 square feet at Lane Crawford in Hong Kong.

Two years ago, Federico Marchetti, the founder and chief executive of the Web retailer Yoox, started an online shoes-only store called Shoescribe, in part, he said, because after tracking sales of footwear on Yoox he had discovered that shoes were his best-selling category by a long way.

They made up almost a quarter of his sales. Many of the shoe-buying consumers were purchasing only shoes, and they exhibited highly recidivist behavior. Today, he says, the business is experiencing triple-digit growth.

An Oscar night staple, Jimmy Choo is popular among both the Hollywood elite, who love it for its red carpet appeal, and women like Michelle Obama, who favor its less towering heels.

It has been popular on television and in movies, featuring in “The Devil Wears Prada.”

Jimmy Choo has passed through the hands of several private equity owners over the years.

The company was first acquired by Phoenix Equity Partners, which later invested in the shoe brand L.K. Bennett, in 2001 and then was passed on to Lion Capital in 2004. Ms. Mellon and TowerBrook Capital Partners took control in 2007.

The company was sold in 2011 to Labelux, a luxury goods company founded by the Reimann family, which owns Joh. A. Benckiser. Earlier this year, Joh. A. Benckiser restructured its luxury arm, putting the Jimmy Choo and Belstaff brands under its direct control.

Bank of America Merrill Lynch and HSBC are acting as underwriters on the offering.
http://dealbook.nytimes.com/2014/09/23/luxury-shoe-brand-jimmy-choo-to-list-shares-in-london/?_php=true&_type=blogs&_r=0

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