American high-end fashion retailer Michael Kors and Chinese private equity company Hony Capital were named as potential bidders among others for the British luxury footwear brand Jimmy Choo, which was estimated to be worth £800 million (approximately 1 billion), in a July 15 report by Sky News.
According to Sky News, Michael Kors is set to submit an indicative bid for the upmarket shoemaker ahead of the bidding deadline next week. It has reportedly been working with the American investment bank JPMorgan.
A company spokesperson from Michael Kors’s New York office told Jing Daily that Michael Kors does not comment on rumors or speculation.
Whether Michael Kors will bid on Jimmy Choo or not, it is worth noting that the accessible luxury retailer itself is in a period of struggle, attempting to shake up its sales performance amid fierce market competition and a sluggish retail environment to eliminate investor concern.
In late May, Michael Kors announced it will close down about 100 to 125 full-price retail stores in the following two years as part of numerous moves it's making to improve profitability. However, market observers such as MKM Partners still think the plan initiated by Michael Kors will not yield results in the short term.
“Following a 900-basis-point decline in operating margin between 2013 and 2017,” MKM Partners’ Roxanne Meyer recently wrote in a note. “We look for a below-plan 430-basis-point decline in 2018.”
In addition to Michael Kors, China’s home-grown PE firm Hony Capital, which owns PizzaExpress, was also named by Sky News to be a likely bidder. The report cited an internal source who said on July 14 that Hony Capital had been in touch with Inter-Parfums, the New York-based manufacturer and distributor of fragrances and cosmetics, about a joint bid for Jimmy Choo. Inter-Parfums owns the license to manufacture Jimmy Choo’s fragrance products.
Jing Daily reached out to the Beijing-based Hony Capital and was told that they did not have any information or comments on this deal at the moment.
The world's leading PE firm CVC Capital Partners was also likely to make an offer, the same report noted.
Jimmy Choo has been put up for sales by its current owner JAB Holding Group, which controls 70 percent of the company's shares, along with another upmarket footwear label Bally, in April. The brand's stock has reported upbeat market performance this year.
Fosun Group, another Chinese company which owns a number of luxury assets such as Club Med and Folli Follie, has also reportedly indicated interest in the brand.