Germany’s Labelux buys upscale shoemaker Jimmy Choo for $811 million

Labelux GmbH, the German luxury-goods company and owner of Bally shoes, yesterday acquired upscale shoemaker Jimmy Choo, for over £500 million ($811 million) from private equity firm TowerBrook Capital Partners.
 
Jimmy Choo was founded in 1996 by London-based Malaysian fashion designer Jimmy Choo and Tamara Mellon, the accessories editor of British Vogue magazine.
 
The Jimmy Choo brand became famous due to the patronage of celebrities like Princess Diana from 1990 and later by the likes of Oprah Winfrey, US first lady Michelle Obama and others.
 
Choo sold his 50-per cent stake in the company for £10 million in 2001 to private equity firm Lion Capital, while Mellon continued to run the company as chief creative officer.
 
TowerBrook had acquired a controlling 83-per cent stake in Jimmy Choo in 2007 for £180 million, with Mellon owning the remaining 17 per cent. Her stake was recently valued at around at £85 million.
 
Under TowerBrook, Jimmy Choo has grown from just being a women's luxury footwear brand, to a range of other products like handbags, small leather goods, eyewear, scarves, belts, fragrance and men's shoes.
 
Sales have grown in every year of Jimmy Choo's existence and over the past four years have outperformed the overall luxury goods market by an average of five times. In 2010, the company reported net sales of £150 million and had 120 stores in 32 countries.
 
The size of the global luxury market was estimated to be worth €168 billion in 2010 and is expected to record compound annual growth of 6.2 per cent to reach €201 billion by 2013. The women's shoes and leather goods segment of the market, in which Jimmy Choo mainly operates, is expected to grow at a faster rate than the overall luxury market.
 
Vienna, Austria-based Labelux is owned by Germany's Reimann family, which also owns perfume maker Coty Inc, a leading global beauty company with sales of nearly $4 billion last year, and a 16-per cent stake in Reckitt Benckiser, a global household, health and personal care company, listed in the   London Stock Exchange with a market capitalisation of over £25 billion.
 
Labelux's existing portfolio comprises of Swiss luxury brand Bally, acquired in 2008 from US-based investment firm Texas Pacific Group, New York-based apparel label Derek Lam, London-based jeweller Solange Azagury-Partridge and Italian accessories brand Zagliani.

''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. Tamara, Josh and the team have created a world-class, customer-oriented business. We welcome them to the Labelux stable and look forward to working with them to ensure Jimmy Choo's continuing success,'' said Reinhard Mieck, CEO of Labelux.

"My ambition for Jimmy Choo to inspire women around the world has never had any limits. I am immensely proud of all we have achieved over the last fifteen years and delighted we are to be part of Labelux, a partner who I know shares our values and passion and who seeks ambitious growth in the luxury industry," said Tamara Mellon.