Michael Kors buys Jimmy Choo for $1.2 million in hopes that it will boost the holding’s sales in a market dominated by extremes when it comes to fashion and price.
High-end shoe company Jimmy Choo PLC will soon be a part of Michael Kors Holdings. On Tuesday, the two fashion houses sealed the deal for 1.2 million dollars (original price 896 million pounds).
John D. Idol, Chairman and Chief Executive Officer of Michael Kors released a statement announcing the acquisition and adding: “We believe that Jimmy Choo is poised for meaningful growth in the future and we are committed to supporting the strong brand equity that Jimmy Choo has built over the last 20 years.”
“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”, said Jimmy Choo Chairman Peter Harf.
As the NY Times reports, this is the first time that Jimmy Choo will be owned by a company with fashion expertise.
Michael Kors Holdings has not revealed what the plans are for the brand, whether it is adding to the existent product categories, or create footwear that is more accessible pricewise. The latter might not be a good strategy since Michael Kors products, which are seen as the lower end of the high-end fashion, have recorded low sales in the past 12 months.
It seems that the Americans are attracted more to the extremes of the fashion offers on the market: they buy either very expensive, or very affordable items. As a result, sales have gone up for luxury brands, such as Gucci, or Dolce & Gabbana and for fast-fashion stores such as Zara, Mango, H&M and more.
Michael Kors falls under the category of affordable luxury brands. Shoes and bags bearing its logo can be found in department stores and outlets and during sale season their price can go quite low.
Jimmy Choo’s fusion with Michael Kors comes just months after Kate Spade was bought by Coach, for 2.4 million dollars.