Michael Kors Holdings Ltd agreed to buy Jimmy Choo PLC for about ￡896 million (US$1.2 billion), as the maker of handbags popular with the commuter set seeks to restore lost luster by adding Sex and the City stilettos.
The purchase of Jimmy Choo, Michael Kors’ first deal to expand beyond its own brand name since its initial public offering in 2011, gives the New York fashion and accessories company a presence in higher-end luxury, in a move similar to Coach Inc’s 2015 acquisition of shoemaker Stuart Weitzman.
London-based Jimmy Choo rose to prominence in the late 1990s, boosted by high-profile devotees including Diana, princess of Wales, and the fictional Carrie Bradshaw in the television series Sex and the City.
The deal comes amid consolidation in the US luxury industry, with Coach also agreeing to buy Kate Spade & Co earlier this year.
“Again, Michael Kors follows the path of Coach — and again, on steroids,” wrote Luca Solca, an analyst at Exane BNP Paribas. “After a meteoric rise and spectacular crash, it is now the time to recycle cash into other brands.”
The company has been closing stores and reducing its exposure to department stores in an effort to boost its exclusivity.
Alongside Ralph Lauren and Calvin Klein, Michael Kors has struggled to maintain its brand image after broadly distributing its products in discount stores and outlet malls.
Michael Kors is to pay ￡2.3 a share for the shoemaker, a premium of 18 percent over Monday’s close, the companies said yesterday.
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