Luxury Brand Michael Kors is on a mission to form a “luxury group” says John D. Idol, the CEO of the brand itself. This information comes right after the news of Michael Kors acquiring London-based accessory and shoe brand Jimmy Choo for a whopping $1.2 billion broke into the media. That’s right the fashion label has agreed to acquire Jimmy Choo.
When will the acquisition process get completed?
The board of directors of both companies have all agreed with the acquisition and the deal is supposed to get closed by the fourth quarter of 2017. This is considered to be one of the most important acquisitions in the world of fashion after Coach decided to acquire Kate Spade in a deal of $ 2.4 billion two months ago.
Jimmy Choo, the luxury shoe and accessory brand is famous for its stiletto heels and is sold around the world. Idol said that this is not going to be the luxury brands’ last acquisition as they are focusing on forming a “luxury group”. He also said that Jimmy Choo as a brand wouldn’t a significant change in the products or the marketing strategy.
Why was Jimmy Choo put up for sale?
Jimmy Choo was put up for sale in the market in April after JAB, the majority owner of the luxury brand started dropping hints about focusing more on consumer goods after its acquisition of Panera Bread. JAB is owned by Germany’s billionaire Reimann family.
Pierre Denis, the CEO of the British luxury brand said that both the companies share the same vision of style and trend leadership and will continue to grow as two single entities by doing what they are best at.
Idol thinks that there is a lot of scope in the market for the growth of accessory business and the men’s footwear business is a “hidden gem” in this growing market. Through this major acquisition he plans to work on these two lines. Michael Kors is one of the largest accessory brands and with this deal they have brought together two industry leaders.
John is looking forward to grow the revenue for Michael Kors’ total footwear revenue from 11 percent of sales to 17 percent. He plans to run both the brands independently but as a major luxury group. Idol feels that the e-commerce is changing everything in the industry and having a digital presence has become a very important part of running a luxury brand.
Market experts are calling the expansion a dangerous move as Michael Kors runs a high risk of devaluing the legendary brand which it has acquired, even though it looks like an interesting baby step towards a bigger picture
