Jimmy Choo wants IPO value near $1 billion
LONDON -- Jimmy Choo, the luxury shoemaker owned by JAB Holdings, may begin its initial public offering here as soon as this month amid rising demand for designer footwear, according to people with knowledge of the situation.
JAB could announce plans to sell a 25 percent stake in the maker of $1,995 Lust peep-toe sandals, said the people, who asked not to be identified because the matter is confidential.
The company has hired Bank of America to manage the sale and is seeking a valuation of about $1 billion, the people said. HSBC Holdings has also been retained, according to one of the people. No final decision has been made and JAB could still decide not to proceed, the people said.
If it does go ahead, Jimmy Choo would follow luxury companies including Moncler, Brunello Cucinelli and Salvatore Ferragamo in selling a stake on the stock market to fund expansion. Choo, which was acquired by private-equity investors three times before being bought by JAB in 2011, sells women's and men's shoes, handbags and accessories in more than 100 stores worldwide. Its eponymous designer left the label in 2001, followed by co-founder Tamara Mellon a decade later.
"This has the potential to be very much a Moncler-type phenomenon," assuming Jimmy Choo plans to expand its product range and distribution, Rahul Sharma, managing director of Neev Capital in London, said in a phone interview.
"There's enough to feel excited about," Sharma said, though without seeing financial data it's hard to say whether the sought-after valuation of $1 billion represents an opportunity for investors. Leather goods and shoes are high- margin products, and the brand straddles the high and more affordable ends of the pricing spectrum, where the biggest opportunities lie, according to Sharma.
Moncler's stock advanced 47 percent on the Italian skiwear maker's first day of trading in December, giving it the best opening-day performance in 2013 among European initial public offerings of more than $1 billion. The stock has fallen 26 percent since amid slowing Chinese demand for luxury goods.
IPOs in London have raised about $27 billion this year, the most since 2007, and gained an average of more than 7 percent to date, according to data compiled by Bloomberg.
Jimmy Choo, whose shoes were made famous by the character Carrie Bradshaw in the television show "Sex and the City," benefits from high awareness and limited distribution in Asia, where consumers are tiring of the world's largest luxury brands such as Gucci and Louis Vuitton, according to Sharma.
"It's no coincidence that smaller brands or the more exclusive brands are doing really well" because wealthy shoppers want something different, Sharma said. Jimmy Choo can sustain revenue growth by opening more stores and continuing to offer daring designs that appeal to both sexes, he said.
JAB reorganized its business in June, bringing brands including Jimmy Choo and jacket-maker Belstaff under direct management in a move it said reflected an increasing commitment to luxury goods.
Representatives for Bank of America and HSBC declined to comment. Representatives for JAB Holdings and Jimmy Choo did not immediately respond to e-mail and telephone requests for comment.