Michael Kors, The Fashion Buy-Out Boom, Will Buy The UK Shoe Brand Jimmy Choo?

When the news of Coach's acquisition of Kate Spade changed from rumor to "explosion news", it was rumored that another potential buyer of Kate Spade was wanted.

Somewhat lonely.

This may be why the market has hurriedly arranged a new capital scandal for it: Michael Kors is likely to buy the UK.

Jimmy Choo.

In fact, when Jimmy Choo parent European investment company JAB announced that it would look for strategic buyers for its luxury brands including Bally and Jimmy Choo, Coach was once one of the most appeals to the market.

It wasn't long before Coach bought the Kate Spade out of $2 billion 400 million.

What's interesting is that when the market's speculation about Kate Spade is finally going to be lost, analysts have suggested that Coach abandon Kate Spade and buy Jimmy Choo or Baily from the perspective of brand market value and offer.

And now in the market, the market has made Jimmy Choo and Michael Kors a perfect match.

Michael Kors Spring 2017 source: Destination Kors - Michael Kors

Of course, these hearsay is not a simple game.

Many guesses are reasonable.

Just like this time, from the point of view of Michael Kors, the company has made a statement before, and will not rule out the expansion of the acquisition method.

Like many American brands, Michael Kors has been restricted by the shrinking department stores in recent two years, and revenue has declined significantly.

Based on the results of the first three quarters of 2016 fiscal year ending December 31, 2016, its total sales fell by 1.8%, while net profit fell 12.5%.

For this reason, Michael Kors's large-scale use of KOL in the world wants to drive sales, but its performance is "disappointing".

So, Jimmy Choo is a brand that is streamlined, positioned more high-end, and the core product category can complement each other with its existing businesses. Indeed, it is a good acquisition option when Michael Kors wants to turn over. Jimmy Choo currently sells 75% of its sales from footwear products, while the sales of Michael Kors can only account for 11% of the total sales of the brand.

Another side,

The price will not be as high as that of Kate Spade.

From the market value of the brand listed on the London Stock Exchange, its market value is $994 million.

If you look at its overall corporate value, according to the women's wear daily data, this figure will be 1 billion 200 million dollars.

Gowling WLG partner Gearge Sevier has said that it is a good time for the brand to buy Jimmy Choo, because its share price has been down for the past ten years, and the British pound is weakening to make British companies more popular in the eyes of foreign buyers.

Jimmy Choo Spring 2017: Source: Nordstrom

However, the management of Michael Kors does not seem to have a bad reaction to this "good business".

Some analysts have suggested that Michael Kors be compared with other acquisitions.

It is better to consider buying shares at the moment because "the company's share price has been down since 2011, and it is a cheaper option for IPO."

And the chairman of the company, CEO John Idol also agreed with this view: "the first thing in our asset allocation strategy must be the repurchase of stocks.

This should be our best investment plan at present. "

But Idol added that the company has been actively looking at other opportunities. If there is a chance to create benefits for shareholders, then management will make full use of such opportunities.

It is not known yet whether the other opportunities in Idol's mouth refer to the case of acquiring Jimmy Choo, because when the women's wear daily confirms the authenticity of the news to both sides of the gossip,

A spokesman declined to give a response, and Jimmy Choo did not respond to it.

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