Jimmy Choo Is Starting to Pay Off for Michael KorsBy
Company also has been working to curb reliance on discounts
Earnings beat Wall Street estimates in holiday quarter
The Jimmy Choo shoe brand, famous for its “Sex and the City” stilettos, is bringing cachet back to new owner Michael Kors Holdings Ltd.
The London-based company credited Jimmy Choo, which it acquired in early November, for helping drive sales during the holiday season. Michael Kors also said it has begun to increase investment in the footwear label to support growth.
Shares of Michael Kors surged as much as 6.9 percent to $69.95 in New York trading Wednesday, marking the biggest gain in three months. That adds to a 4 percent gain so far this year.
Michael Kors is counting on the brand to restore prestige to a fashion house battered by deep discounting and a heavy reliance on the struggling department-store industry. Chief Executive Officer John Idol has been working to cut the amount of promotions and raising the average price of women’s handbags and small leather goods. Comparable sales are still falling at the company -- they dropped 3.2 percent last quarter -- but less than Wall Street had feared.
The Jimmy Choo lineup “helped drive revenue during the quarter,” Idol said in a statement.
Michael Kors agreed to buy Jimmy Choo last July for about $1.2 billion, aiming to increase its global footprint. Choo was the Michael Kors’s first expansion outside of its legacy brand and signaled the company’s move into higher-end luxury.
Earnings amounted to $1.77 a share last quarter, excluding some items. Analysts had estimated $1.29. Comparable sales -- a closely watched measure -- was expected to drop 6.4 percent, according to Consensus Metrix.