Luxury shoe brand Jimmy Choo put up for sale
Majority investor JAB may also dispose of Bally as it increases focus on consumer goods
British luxury retailer Jimmy Choo has put itself up for sale to try to maximise shareholder value as majority investor JAB increases its focus on consumer goods.
JAB Luxury also said on Monday that it was reviewing its ownership of Bally International, the Swiss luxury footwear and accessories company, clearing the way for a possible sale of that business, too.
Jimmy Choo, famous for its stiletto shoes and accessories, has discussed its plans with 68 per cent shareholder JAB, which supports the process as part of a move away from a luxury sector it now considers “non-core”.
Shares in Jimmy Choo hit a record high, valuing the business at about £720 million (US$921 million).
JAB Holdings, the investment vehicle of Germany’s billionaire Reimann family, has been building up its coffee and food chains and agreed this month to buy bakery group Panera Bread for US$7.2 billion.
Jimmy Choo’s shares, which floated on the London Stock Exchange at 140 pence in 2014, had increased 35 per cent over the past year before Monday’s announcement.
“What remains to be seen is whether growing interest from Asia and the Middle East for luxury British brands will see Jimmy Choo receiving offers from foreign buyers searching for well-known British brands,” said Jonathan Buxton, partner and head of consumer at Cavendish Corporate Finance.
Last month, Jimmy Choo reported a 15.7 per cent rise in annual core earnings to £59 million as revenue grew 14.5 per cent.
JAB’s luxury portfolio also includes British jacket brand Belstaff, which could now be surplus to requirements. It indicated that it intended to retain its investment in beauty products maker Coty.
“JAB has therefore made the strategic decision to focus on its successful core businesses of consumer goods, including Coty,” it said, adding that it expected the review to complete in the second half of 2017.
Jimmy Choo said Britain’s Takeover Panel had agreed that any talks with third parties could be conducted within the context of a “formal sale process”. That enables talks with interested parties to take place on a confidential basis.
The firm said it was currently not in receipt of any approaches. The sale process will be run by Bank of America Merrill Lynch and Citigroup.