Jimmy Choo purchase just the start, says Michael Kors CEO John Idol
More deals on cards for fashion brand as it seeks to expand its retail base and build a multibrand luxury goods empire
Michael Kors isn’t done with deals. The fashion house, which agreed to buy luxury shoemaker Jimmy Choo for about US$1.2 billion this week, is planning to build a portfolio of upscale brands. And that means acquiring more businesses, possibly in the same billion-dollar range, according to chief executive officer John Idol.
“We are not going to do something small, let me just say that,” he says. “We are not going to buy a US$10 or US$20 million brand, that’s not going to move the needle for us.”
Michael Kors to buy luxury shoemaker Jimmy Choo for US$1.2 billion
The company is turning to deals as it tries to regain lost sales – a slump brought on in part by its flagship brand becoming too exposed. Michael Kors plans to focus on integrating Jimmy Choo, known for its Sex and the City stilettos, in the next six to 12 months. Then it will start shopping around again, Idol says.
The Jimmy Choo acquisition was Michael Kors’ biggest effort to expand beyond its own brand name since its initial public offering in 2011. The takeover gives the company a greater presence in higher-end luxury – and helps it play catch-up with Coach Inc, which agreed to buy Stuart Weitzman in 2015 and made a US$2.4 billion deal to buy Kate Spade & Company in May.
It also helps decrease Michael Kors’ reliance on handbags. Both Michael Kors and Coach are trying to become something akin to European luxury conglomerates, with a diversity of brands.
“These two fashion houses are trying to achieve what Kering and LVMH have done in an American way,” says Milton Pedraza, a New York-based luxury consultant.
