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Jimmy Choo Walks All Over Michael Kors
Carrie Bradshaw's favorite fetches a well-heeled price.
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Jimmy Choo Plc is walking over Michael Kors in its $1.4 billion sale to the U.S. luxury house. To justify the price, Michael Kors Holdings Ltd. is going to have to achieve a step-change in the icon shoe brand's financial performance. If that means chasing higher volumes, it risks damaging the cachet of its new addition.
London-based Jimmy Choo put itself up for sale in April after barely three years as a public company. Selling to Kors gives its 68 percent owners, privately-held JAB Investments BV, and their stock market co-investors a very respectable exit. The annualized return since IPO is about 20 percent. The deal was struck at a 37 percent premium to a strong share price.