LONDON — Labelux Group, which on Sunday announced its purchaseof Jimmy Choo, said the London-based brand has miles of unfulfilledpotential —and nowhere more so than in Asia.
The group, whoseholdings including Bally, Derek Lam, Zagliani and SolangeAzagury-Partridge, bought Choo from TowerBrook Capital LLP for anundisclosed price.
It beat competitors including TPG Capitaland Jones Group Inc. in a deal sources say valued Choo at 549 millionpounds, or $889.4 million.
The sale to Labelux comes 10 yearsafter private equity owners Equinox, under the guidance of industryinvestor Robert Bensoussan, first purchased Choo, valuing the company at20 million pounds, or $32.4 million.
Jimmy Choo has changedhands twice since then, its size, geographical reach and valuationspiraling each time. Labelux is Choo’s first industry, non-privateequity, partner.
All figures have been converted at currentexchange.
In its statement, Labelux said the management team,including chief executive officer Joshua Schulman and chief creativeofficer Tamara Mellon, who co-founded the company with Mr. Jimmy Choo,will remain in place.
“Jimmy Choo is a perfect fit for us, andwe see ourselves as long-term strategic investors,” said Reinhard Mieck,ceo of Labelux, in a telephone interview Sunday.
“Joshua,Tamara and the management are going to need to deal with us for a verylong time. We are thinking about strategies today that will take usbeyond this generation to the one after that,” he added.
Labelux,which was formed in 2007 and is a division of the private, family-ownedJoh A. Benckiser SE, owner of perfume maker Coty Inc., has so much tooffer Jimmy Choo,” said Mieck.
He said Choo would complement —rather than compete with — Bally, and the two companies could help inother in different markets. “Jimmy Choo has enormous potential in Asia,and Bally has been there for 25 years. It could provide enormous supportfor the brand going forward. Bally can benefit from Jimmy Choo’s retailposition in the U.S. It’s a perfect fit for both,” Mieck said, addingthat other synergies, such as media costs, were in the cards.
Schulman,who was brought in by TowerBrook, said in a telephone interview:“Labelux is an ideal home for Jimmy Choo, the perfect partner. It’s ayoung, dynamic group and Jimmy Choo fits the portfolio so well — we werethe missing piece in their puzzle,” he said, adding that TowerBrook hadbeen “excellent partners and stewards for the brand.”
Mellonsaid: “My ambition for Jimmy Choo to inspire women around the world hasnever had any limits. I am immensely proud of all we have achieved overthe last 15 years and delighted we are to be part of Labelux, a partnerthat I know shares our values and passion and seeks ambitious growth inthe luxury industry.”
Mieck said Choo was attractive, inparticular, because “it is not a niche brand. It has a wide range ofcustomers and differentiated brand equity.” Labelux was impressed withthe multichannel distribution, and the growth prospects across allcategories, he said.
TowerBrook kicked off its strategic reviewof the brand in September, retaining Goldman Sachs and Morgan Stanley toevaluate strategic options for the company it purchased from LionCapital in 2007.
Their timing could not have been better:Revenues at Choo have more than doubled since TowerBrook took over, andthe brand now has some 120 stores, up from 77 units when TowerBrook madeits purchase.
An industry source familiar with Jimmy Choo saidthat the sale to an independent buyer was always the preferred optionfor Choo principals, although the company was considering an initialpublic offering on the Hong Kong Stock Exchange.
“The IPOoption was on the table, but it wasn’t the ideal option. All the partieswanted a clean sale, a clean break,” the source said, adding that ofall the candidates, “Labelux wanted it most.”
Mellon founded thebusiness in 1996 with Mr. Jimmy Choo, the Malaysian-born Chineseshoemaker whose clients then included Princess Diana.
Earlierthis year, Daniel Stewart, the London-based investment bank andcorporate advisory firm, confirmed it is working with Mr. Choo on apossible bid, but that did not come to fruition.
“Substantialpotential awaits the Jimmy Choo brand, particularly in Asia, whereLabelux has a proven track record,” said Ramez Sousou, co-ceo ofTowerBrook, about the Labelux deal. “We have huge admiration for Labeluxand are delighted [they] will be supporting Jimmy Choo in the nextstage of its development.”
The company’s sales in 2010 were 150million pounds, or $243 million, and principals said it is generatingdouble-digit growth in all categories and regions. In addition tofootwear, the brand offers handbags, small leather goods, eyewear,scarves, belts, frangrance and men’s shoes. The newly-launched JimmyChoo fragrance has “exceeded every expectation possible” and is turningout to be one of the most successful fragrance launches at Saks FifthAvenue, Schulman said.
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