Michael Kors to buy Jimmy Choo in $1.35bn deal

Michael Kors handbags in a store in Paris

Jimmy Choo's recent history includes a lawsuit previous year from its former co-founder Tamara Mellon, who also wrote a tell-all in 2013. The company owned by the designer known for luxe sportswear and moderately-priced handbags is buying Jimmy Choo, the high-priced shoe brand that rose to prominence as the fictional Carrie Bradshaw's favorite in the classic TV series, Sex and the City.

The update comes three months after Jimmy Choo put itself up for sale, with majority shareholder JAB, controlled by the German billionaire Reimann family, looking to move out of the luxury fashion market.

Jimmy Choo's main shareholder JAB Holdings, which owns about 70 per cent of the company and is also an investor in Krispy Kreme donuts and luxury firm Coty, said it is supportive of the process.

Michael Kors' shares fell 1.2 percent in morning trading on the New York Stock Exchange.

Chanel Iman, Michael Kors, and Heidi Klum at the Annual amfAR Inspiration Gala at The Museum of Modern Art in 2011.

But why did Michael Kors want to pony up the cash for Jimmy Choo? As a strategic business decision, Michael Kors thinks they are in the best position to continue Jimmy Choo's growth.

In a statement, Muchael Kors said Jimmy Choo is the "ideal partner".

The price is equal to about 13 times Jimmy Choo's adjusted earnings for 2017, according to Bloomberg Intelligence analyst Deborah Aitken.

Jimmy Choo was initially valued at about £700 million.

Jimmy Choo's chief executive, Pierre Denis, who has run the company since 2012, will stay on, alongside creative director Sandra Choi, who has been with the firm since the beginning, and the finance director, Jonathan Sinclair.

The acquisition is an opportunity to grow Jimmy Choo sales to $1 billion and it provides greater exposure to global markets, particularly in Asia.

He added: "We admire the glamorous style and trendsetting nature of Jimmy Choo designs". Similar to what Coach did when the company acquired Stuart Weitzman, the company plans to "support the growth of Jimmy Choo through retail store openings and further development of its online presence as well as through an expanded assortment of additional fashion product offerings".

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