It seems like Michael Kors has bought himself a new pair of shoes worth $1.2 billion.
Yes, you heard it right! What kind of shoe costs that much? The answer is simple; it is Jimmy Choo of course!
It was confirmed this Tuesday that Michael Kors Company bought Jimmy Choo for $1.2 billion. The British firm has been up for sale since April this year and has attracted the attention of many suitors.
Why, You Ask?
Jimmy Choo’s offer for sale of the Company in April came after its majority owner JAB, the investment vehicle of Germany’s billionaire Reimann family, signalled its intention to focus on consumer goods instead.
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Michael Kors’ firm, that is heavily reliant on its outlets and department stores where deep discounting is common, have recently attempted to attract more customers and gain profit at the same time while making them pay full price.
In May this year, it announced the closing of as many as 125 of its retail stores.
In 2017, the company witnessed the loss of a fifth of its share price.
The deal for Jimmy Choo comes a few months after Coach. Inc agreed to buy American handbag brand Kate Spade for $2.4 billion with the hope that the two affordable luxury brands could carve out a new territory among the masses. This, in turn, increased the pressure on the need for Michael Kors to find new avenues for its growth.
What To Expect Next?
M. Kors who is the honorary chairman and Chief Creative Officer of the firm described Jimmy Choo as “a premier fashion luxury house that offers distinctive footwear, handbags and other accessories…”
The question now is whether the firm will significantly change the defining features of the beloved shoe brand, or retain and improve them, or whether this deal will attract those section of people who have been loyal to the brand thereby increasing its sales, or all of the above.
The deal is the latest in the series of foreign takeovers of UK companies that have been brought about since Brexit in June 2016.
The deal is a significant one as it represents the amalgamation of two of the biggest brands in the fashion industry. With the joining of these two firms, one can therefore only hope to expect great things ahead.
Image Credits: Google Images
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