Money Matters - Simplified

Labelux acquires Jimmy Choo for $812mn

Under the direction of TowerBrook, Jimmy Choo originally known for its handmade women’s shoes has developed into a global brand, diversifying into men’s shoes, accessories, handbags and perfumes.

In an attempt to strengthen its foothold in luxury market, Labelux, the privately held group has acquired the high-end shoe and accessories label Jimmy Choo, leaving behind other potential buyers TPG Capital and Jones Group.

While the financial terms of the deal have not been officially disclosed, media reports indicate Labelux paid the owner TowerBrook Capital Partners and other shareholders ₤500-550 million or nearly $812 million for Jimmy Choo.

The transaction is expected to be finalized by the end of June following a sale process by Morgan Stanley and Goldman Sachs Group Inc.

Jimmy Choo’s top management team including its founder and chief creative officer, Tamara Mellon, and its chief executive, Joshua Schulman, will stay with the company and retain their existing positions at the shoe retailer after the acquisition.

Reinhard Mieck, chief executive officer of Labelux, stated, "We are delighted to announce this acquisition. Jimmy Choo is an outstanding brand with enormous growth potential and the ability to deliver material growth synergies across our group."

In 2007 TowerBrook Capital acquired 83 percent stake of the company for 185 million pounds. The latest deal is likely to give TowerBrook almost three times that it paid for the fashion house four years ago.

Jimmy Choo founded in 1996
Jimmy Choo Ltd. was established in 1996 in London by the shoe maker who gave his name to the company and former Vogue editor Tamara Mellon with a £150,000 loan from her father Tommy Yeardye.

Since its conception, it has changed hands four times in 15 years with Choo relinquishing his 50 percent share of the business in 2001.

In 2007 TowerBrook Capital acquired 83 percent stake of the company for 185 million pounds. The latest deal is likely to give TowerBrook almost three times that it paid for the fashion house four years ago.

Under their direction, Jimmy Choo originally known for its handmade women’s shoes has developed into a global brand, diversifying into men’s shoes, accessories, handbags and perfumes.

The company currently has about 120 international stores, two times the number when TowerBrook bought it.

Jimmy Choo’s presence is in the international market is growing rapidly, fueled by the rising demand for luxury items in Asia, especially China. The company sales hit £150 million last year.

Ramez Sousou, co-chief executive of TowerBrook, stated,"Jimmy Choo has expanded from 60 stores to an international footprint of 120 sites and substantial potential awaits the Jimmy Choo brand, particularly in Asia, where Labelux has a proven track record.”

A little about Labelux
Labelux, the luxury goods group founded by Germany's billionaire Reimann family is located in Vienna, Austria.

It was established in 2007 and a substantial portion of their fortune is derived from consumer goods.

Other investments of Labelux include brands such as the Bally bag and shoe designer, the Derek Lam fashion label and Solange Azagury-Partridge.