This is probably the most surprising purchase of this year. The Michael Kors Holding has acquired the world-famous luxury shoe brand, Jimmy Choo.
Michel Kors is known all around the world, mainly because of his magnificent handbags. However, the shoes were never his strength, so this step can be treated as a strategic play that aims to increase sales and complement the brand portfolio. The value of the deal was £896 million, nearly $1.2 billion.
Michael Kors is a widely-known, award-winning designer and producer of luxury accessories and clothes. The company, established in 1981, currently manufactures a range of products under the signature of Michael Kors Collection and MICHAEL Michael Kors labels. These products include accessories, footwear, watches, jewelry, men’s and women’s clothes, eyewear and a full line of fragrance products.
Nevertheless, Michael Kors some time ago stopped being associated with the tops of the luxury accessories producers and it has directly reflected on his sales last few years. Why did it happen? It is all because of common availability to his counterfeit products. Let’s have a look at his most popular bag Mercer Leather Bag. It costs £300-400, when it is very common to find on the online auctions handbags for so little as £50. And they were and still are widely bought by women all around the world, so within few years Michael Kors has lost his recognition as a luxury band.
Michael Kors purchased the Jimmy Choo brand
The purchase of the Jimmy Choo brand was of interest of many investors, but ultimately the winner offer belonged to the Michael Kors holding.
It is worth mentioning that Jimmy Choo was founded in 1996 by Malaysian shoemaker and Tamara Mellon, Vogue magazine editor. The brand has changed its owners few times already. It has already been taken over by capital funds three times. In 2011 the JAB Holdings fund bought the company, and three years later decided to introduce it to the stock exchange. For one share they were paid £140 at the time, but after the deal was announced the Jimmy Choo price had risen to around £228.
How will this change affect the perception of the both brands? Now probably no one is able to answer this question. One thing is certain now anyway, Michael Kors should vanquish the illegal counterfeit market to restore its position.