Well, it seems like coffee is a better business than fashion. Atleast the Reimann family, who control JAB Holding believe so. On April 24, the luxury shoe brand in which JAB owns a 67.6 per cent stake, has been put up for sale. Jimmy Choo is up for sale for anyone who can cough up £700 million. Analysts firmly believe that Jimmy Choo could attract attention from it’s rival luxury houses.
The firm was co-founded by Malaysian shoemaker Jimmy Choo, who was trained at renowned Cordwainers Technical College in London and former Vogue journalist Tamara Mellon in 1996. The brand quickly picked up with a loyal and dedicated clientele which included musicians, actresses and royalty. The Duchess of Cambridge is a fan of British shoe designer, while Beyonce and Oscar winning actress Emma Stone also adore the brand.
The fashion house confirmed that they haven’t received any bids yet and there are also looking into various different strategies to support this process. Shedding its investments in the three leather-goods companies would take JAB out of the fashion industry, ending an eight years long effort to build a viable luxury group to compete with the Big Three – LVMH Moet Hennessy Louis Vuitton, Richemont and Kering.
The strategy shift implicitly declares that the increasing desire of consumers to spend money on experience like coffee as compared to, say, handbags. According to documents seen by New York Times, “JAB has made significant investments in coffee and related areas in recent years that they noe consider its investment in luxury as noncore.”
It can be perceived as the grand experiment has apparently come to an end. It’s only been three years since Jimmy Choo’s stock market flotation. Its share price is on a jerky ride since 2014. But Jimmy Choo has outperformed the luxury sector and shares have bounced back. Maybe it’s not a bad time to consider putting the business up for sale.