Michael Kors Finds Jimmy Choo Shoes To Match Its Bags For $1.35 Billion

LONDON (CBS SF/AP) — In a bid to burnish its brand image, American bag and accessories maker Michael Kors is buying luxury shoemaker Jimmy Choo in a deal worth £896 million pounds ($1.35 Billion).

Jimmy Choo, which counts Jennifer Lopez, Duchess of Cambridge Kate Middleton and Beyonce among its fans, has a high-level profile that tempted Michael Kors to pay a premium.

Shareholders in Jimmy Choo will get 2.3 pounds in cash for each share, about 36.5 percent above the firm’s share price of 1.685 pounds on April 21.

Michael Kors has struggled recently, announcing in May that it would close up to 125 stores due to weak sales.

It said that Jimmy Choo is “the ideal partner” and will have its online presence bolstered as a result of the deal. Jimmy Choo CEO Pierre Dennis and Creative Director Sandra Choi will remain in their jobs.

“Jimmy Choo is poised for meaningful growth in the future and we are committed to supporting the strong brand equity that Jimmy Choo has built,” said John Idol, CEO of Michael Kors.

Analysts from Jefferies said the deal could help Michael Kors rebuild its brand name, though that would happen in the longer-term and not have an immediate impact on the company’s stock.

“We believe the strategic steps Kors is making to elevate its own brand are working, and believe the addition of Jimmy Choo, an iconic premium luxury brand, should be beneficial,” the analysts said in a note to clients.

Shares in Jimmy Choo were up 17 percent at 2.28 pounds on Tuesday, while Michael Kors was down 2.5 percent at $34.

TM and © Copyright 2017 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2017 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten. The Associated Press contributed to this report.

 

Comments

Leave a Reply

Please log in using one of these methods to post your comment:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From CBS San Francisco

Get The New CBS SF Bay Area Local App
Got Our Weather App?
LIVE: Monday through Friday from 3am – 3pm PST
%d bloggers like this:

Watch & Listen LIVE