A deal between two major brands is shaking up the show industry.
Michael Kors reached a deal to acquire shoemaker Jimmy Choo for about $1.35 billion in another shakeup for the wobbly luxury retail sector.
Amid a contraction of its own retail footprint, Michael Kors said the deal would give it a greater position in the market for luxury footwear and accessories, afford opportunities to expand in Asia and diversify its product line into men’s wear.
The deal comes three months after Jimmy Choo put itself up for sale following a drop in 2016 sales at stores open at least a year.
It also comes amid rapid change for the broader luxury sector. Luxury retailer Coach recently acquired handbag and accessories maker Kate Spade.
Michael Kors has also been navigating turbulence, having announced plans in May to close up to 125 of 960 stores worldwide.
Jimmy Choo has 150 company-operated stores, more than 60 franchised locations and 560 other selling points.
Michael Kors said it hopes to more than double Jimmy Choo’s annual sales to $1 billion.
“The company is a leader in setting fashion trends. Its innovative designs and exceptional craftsmanship resonate with trendsetters globally,” Michael Kors CEO John Idol said in a statement. “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.”
Pierre Dennis will keep his title as CEO of Jimmy Choo, which was majority-owned by JAB Luxury. Other lead executives, including Sandra Choi and Jonathan Sinclair, will also stay on.
The deal gives Jimmy Choo shareholders 2.3 pounds in cash for each share, a premium of 36.5 percent on the firm’s share price of 1.685 pounds on April 21.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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