News that Jimmy Choo was purchased for a hefty $1.2 billion by Michael Kors was big. So big, in fact, that it spread beyond the fashion industry and Wall Street to casual observers of both, and was met with an air of disbelief. Kors’ buy was unprecedented in that the company paid 17.5 times more for Jimmy Choo than its current earnings. The move also inspires raised eyebrows from industry vets like myself, a seasoned accessories-focused journalist. The buy seems to echo the strategy of Coach Inc., which has publicly said it is looking to become an American luxury group akin to France’s LVMH and Kering, though “luxury group” may be a bit of a misnomer, as Coach’s portfolio of brands offers products that may shine in design, quality, and innovation, but are considered accessible luxury.
Coach Inc. bet on some sure winners—recent acquisitions with Stuart Weitzman and Kate Spade New York can not only boast healthy business on paper, but are also winners when it comes to highly coveted merch. Stuart Weitzman has core products that consumers clamor for—the Allways stretch-back boot line, for example, which essentially eliminated the “fat-calf” affliction that prevented many women from being able to wear knee-high and thigh-high boots, or the Nudist sandal, which is not only a red-carpet favorite, but is worn at weddings, black ties, and special occasions worldwide. And who can forget the brand’s “most expensive shoe in the world,” encrusted with diamonds?
Kate Spade New York has also had a successful recipe for product sales under the design direction of Deborah Lloyd. The affable Brit has honed in on the brand’s quirky-kitschy-preppy charm and dialed it up a notch or two from there, sending out a solid message season after season. Kate Spade New York’s lifestyle component has flourished under Lloyd, too. While the Kate Spade Saturday lifestyle concept didn’t pan out, Lloyd and CEO Craig Leavitt, who announced his departure from the brand just days ago, branched out to include lines within the line, like Broome Street, as well as swim, home textiles, and lingerie licensees. Not bad for a company that started with a black nylon bag in 1993.
Both Kate Spade New York and Stuart Weitzman appeal to fashion junkies and those without the faintest clue. And when a product reaches that breadth of consumer, the cha-ching! really starts to happen. Thus far, the Coach portfolio has names that resonate in the heartland. Ditto for Michael Kors—the designer has reached Ralph Lauren and Tommy Hilfiger brand recognition level, especially with his handbags and Project Runway TV role. But Jimmy Choo isn’t synonymous with a quality American product because it isn’t one. Based in London and showing in Milan, the shoe-prominent accessories brand has that European caché, perhaps part of the appeal for Michael Kors in wanting to become a powerhouse luxury group.
What makes the Michael Kors purchase interesting is that those in charge seem to be somewhat disconnected from the fact that Jimmy Choo’s aura of desirability has begun to wane in recent seasons.
The brand, which was formed in 1996 by Tamara Mellon and Jimmy Choo (although Mr. Choo was making bespoke shoes and small batch runs that were sold in Bergdorf’s, among other places, well before that) hit the height of its popularity around 2010-2011 before being sold to Labelux. Mellon, largely credited with its success, exited the brand in 2011.
At that time, Sandra Choi, Choo’s niece who was with the brand since its inception, stepped into the role of creative director along with Simon Holloway. Out of the gate, the new designs sparked a lot of interest and focused on one-of-a-kind styles with a collection of bejeweled bespoke shoes and bags meant for the museum case more than anything. But rumored creative differences or the inability to share the spotlight disbanded the duo and Holloway exited in 2013. He landed at Hogan—always a sneaker brand—just when the designer sneaker trend was taking off. He is now the creative director at Agnona.
When current Jimmy Choo CEO Pierre Denis arrived at the brand in 2012, up first on the agenda was a greater distribution in Asia. Categories such as fragrance, eyewear, and an ever-expanding men’s collection have kept things flush at Jimmy Choo the past five years. But despite the short-lived boost in celebrating its 20th anniversary, 2016 was a mixed bag, with factors such as retail shop overhauling and the general luxury goods lull affecting sales growth. Michael Kors has been said to have been attracted to the brand in part because of its name recognition.
That may be, but the buzz factor around this brand has all but dimmed. What once was a must-have label in fashion, one that was made famous in in movies and TV shows such as The Devil Wears Prada and Sex in the City, is struggling with the covet-ability factor. Jimmy Choo’s strength was once heavily embellished shoes and bags; now, that looks dated. The stiletto, which dominates its product offerings, will surely always have an audience, but it doesn’t feel fresh or current right now in fashion thanks to the current focus on streetwear, comfort, and sheer wearablity. Turning that ship around will be Michael Kors’ key battle with this first addition to its ambitious luxury portfolio plan. That’s not to say it can’t be done—indeed, there is a value to the brief history behind the Jimmy Choo name, and the styles of the aughts are, after all, trending once again. But returning Jimmy Choo to mega-brand status is going to take more than a passing nostalgic fad, and it’s going to be interesting to see how the higher-ups at Michael Kors plot the company’s new path.