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Featured10.21.14

Jimmy Choo IPO Kicks Off Despite Rough Market

Volatility in the global markets had some companies postpone their IPOs last week, but mid-market luxury brand Jimmy Choo is taking a brave step toward expansion.

Luxury shoe brand Jimmy Choo debuted on the London Stock Exchange with an IPO priced at the bottom of its range at £1.40 per share which set the company’s equity value at $875.7 million, making it the first standalone luxury footwear brand to enter the public realm.

An important milestone for Jimmy Choo nevertheless meant sidestepping the volatility of the global markets as other companies have quietly postponed their own IPOs. Among them, U.S.-based Box Inc. the cloud storage provider, French engineering company Spie, and British lender Virgin Money. Others such as German tech company Rocket Internet and e-commerce clothing company Zalando that braved their float in the past few weeks have struggled as shares are now priced below their initial offerings.

The 18-year old Jimmy Choo, named after its original designer, is no stranger to navigating tough terrain. Founded in partnership with former Vogue accessories editor Tamara Mellon, Choo began with one boutique in London and a wholesale business. From there it evolved into a high-growth luxury company, thanks in part to the company’s signature vertiginous stilettos –more suited to posing than strolling– that can command upwards of $1000 per pair.

After Choo sold his share to Equinox Luxury Holdings in 2001, the company introduced handbags and expanded into additional territories. Lion Capital acquired a majority share in 2004, valuing the company at £101 million. Three years later, TowerBrook Capital Partners, an international private equity firm, acquired a majority stake of 80 percent.

Through the changing of investor hands, Tamara Mellon took the helm in 2007, steering the brand to expand into fragrance and collaborations with Swedish fast fashion juggernaut H&M and Australia’s Ugg brand. In 2011 she struck a deal with JAB Luxury all with a goal to build Jimmy Choo into a billion dollar enterprise.

Before that could be realized, Mellon left the company, selling her 17 percent stake after Jimmy Choo was sold to Labelux, a division of Joh. A. Benckiser, for about $855 million.

Jimmy Choo’s IPO saw JAB Luxury sell some of its stake. Its holding now totals 70.2 percent.

With 170 stores in 34 countries, Jimmy Choo posted sales of £281.5 million in 2013. The company’s got its eye on expansion into China, but plans to open 10 to 15 stores a year globally with the help of this IPO. At the close of trading yesterday shares were up 2.60 percent, making its offering a bright spot amid a lackluster month.

Jimmy Choo’s IPO may also light the way for others stateside, despite recent news of postponements. The U.S. is still on track to have the most activity since 2000, according to research by CohnReznick, a tax and advisory firm for the middle market. Two hundred and thirty IPOs took place during the first three quarters of the year, compared with 180 for the same time period in 2013. CohnReznick expects 2014 to finish out with more than 315 IPOs.

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