That's a lot of shoes: Michael Kors Holdings has officially agreed to buy luxury shoe brand Jimmy Choo for a cool £896 million, or $1.2 billion.
Jimmy Choo was founded in 1996 by Tamara Mellon and Jimmy Choo and quickly rocketed to the top of the luxury shoe rack thanks to celebrity red carpet placements and a little show called "Sex and the City." The brand changed hands through private companies three times before becoming the first luxury shoe brand to go public in 2014. Kors has agreed to pay 230 pence in cash for each Jimmy Choo Share, or 17.5 times Jimmy Choo's Adjusted EBITDA for 2016. The transaction has been approved by the boards of both Jimmy Choo and Michael Kors.
In a statement, Michael Kors CEO John D. Idol confirmed that Jimmy Choo CEO Pierre Denis will stay on, as will creative director Sandra Choi. "Ms. Choi and the rest of the highly-talented management team have done a tremendous job, and this continuity of leadership will ensure that the DNA of Jimmy Choo is maintained as we work together to continue to grow the brand globally," Idol says.
Jimmy Choo Chairman Peter Harf adds, "A combination with Michael Kors will allow Jimmy Choo to embark on its next phase of growth and provide opportunities for the benefit of Jimmy Choo customers, employees, shareholders and other stakeholders."
Kors's own company has struggled in recent years, announcing it would close 100 stores over the next few years and blaming setbacks on department store discounts and declining mall traffic. It's interesting to consider that rival brand Coach bought Stuart Weitzman in 2015 and that both Coach and Michael Kors were said to be in the running for acquiring Kate Spade (that brand ultimately went to Coach in May for $2.4 billion). In May, Coach was also rumored to be eyeing Jimmy Choo. Is the Great American Luxury Conglomerate Race finally on?