Coach Is Bidding For Jimmy Choo, With An Estimated Turnover Of 1 Billion Pounds.

In the face of more uncertainty in the global luxury retail industry, there are more and more signs of us over $10 billion market value.

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(NYSE: COH) is starting a continuous acquisition to expand market share.

According to the latest news of British media today, Coach is bidding for Jimmy Choo (LON: CHOO), with an estimated paction volume of up to 1 billion pounds.

If the paction is successful, this will be the fourth time that Jimmy Choo has changed hands since its establishment in early 90s.

Up to now, neither side has commented on the news.

The board of directors of Jimmy Choo announced last week that it had decided to seek sale and began reviewing all kinds of strategic options to maximize shareholder value.

JAB, the main controlling shareholder of Jimmy Choo, said

The retail environment continues to slump, and in the future, it will abandon its Jimmy Choo and Bally fashion businesses and develop consumer goods such as coffee and sandwiches.

At present, JAB owns Jimmy Choo up to 68% stake.

Coach group has been expanding its group size in recent years and plans to acquire more luxury brands, but last year's plan to acquire Burberry (LON:BRBY) ended in failure.

If the two are combined, it is expected to become a new luxury giant with a market value of nearly $20 billion.

It is noteworthy that Coach recently hired Joshua Schulman, who served in Jimmy Choo as the chief executive of the brand, which will make Coach more competitive in the process of bidding for Jimmy Choo.

Joshua Schulman will take office in June 5th and will be responsible for all the Coach brand's global business and report directly to group CEO Victor Luis.

Some analysts pointed out that Joshua Schulman will become the chief executive of Coach brand, which will enable Victor Luis to focus more on the design and implementation of the acquisition strategy, and further expand the Coach brand matrix.

In addition to the Coach brand, Coach group also owns the Stuart Weitzman, an American shoe brand that was acquired earlier, and is competing with rival Michael Kors (NYSE:KORS) for Kate Spade (NYSE:KATE).

Some people have pointed out that if Coach group can successfully acquire Kate Spade and Jimmy Choo, its operation mode will be closer to LVMH, Kai Yun and other luxury groups.

As of the second quarter of December 31st last year, Coach group's net profit increased 17.4% to $199 million 700 thousand over the same period.

The group's flagship brand Coach sales in North America rose 2% to 744 million US dollars in the same period last year, same store sales increased 3%, sales of wholesale channels such as department stores dropped by 30%, Coach sales in other parts of the world increased 3% to 448 million US dollars, of which sales in Greater China were the same as last year, and the growth rate in Japan was 9% over the same period last year.

Ian Bickley, President of Coach group, has revealed that since 2008, when Coach has reclaimed all franchises in China, the sales performance of the market has gradually increased, accounting for 20% of the total revenue of Coach's global business. The group is very optimistic about China's market potential and plans to add 20 to 25 stores in the Chinese market this year.

Victor Luis said at the beginning of this year's earnings conference that handbags, accessories and shoes would be the first choice for Coach group's future acquisitions.

Mortimer Singer, chief executive officer of Marvin Traub Associates, also believes that as a group led by accessories, Coach group's brand expansion strategy based on accessories has indeed become the potential of multi brand groups. After all, the major source of income of LVMH, Kai Yun and Li Feng is also accessories products such as handbags and shoes.

According to the world clothing and shoe net, compared with the Michael Kors with a market value of $6 billion 50 million, Coach, which has a market value of about $11 billion, has the opportunity to stand out in the bidding. At the same time, bankers believe that Jimmy Choo is unlikely to attract luxury groups such as cloud or LVMH, because these two groups are currently working to simplify business rather than expand it.

However, since Jimmy Choo has been well liked by Middle East consumers, potential buyers include Mayhoola, Qatar's private equity fund, which owns Valentino, Balmain and Anya Hindmarch.

Jimmy Choo was listed in London in 2014 and now owns more than 150 stores around the world.

In the past three months, its stock price has risen more than 25%, and its market value is about 728 million pounds.

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