These days, the luxury industry isn’t just trying to find buyers on the store sales floor, it’s also seeking buyers behind the scenes. The latest example: shoe label Jimmy Choo, worn by celebrities from Emma Stone to Katy Perry, has put itself up for sale, in another sign of the luxury industry reshuffle.
Jimmy Choo’s majority owner, JAB Holding, said Monday it’s in favor of the sale as the investment company, which recently agreed to buy Panera bakery café, also said it’s exploring strategic options, including a possible sale, for another of its luxury brands, Bally.
JAB, which also owns Caribou Coffee, Peet’s Coffee & Tea, and Krispy Kreme Doughnuts and Stumptown Coffee, said it now “considers its investment in luxury as non-core” as it seeks to “focus on its successful core businesses of consumer goods,” including beauty product company Coty Inc., which makes products from OPI nail polish to Marc Jacobs fragrance.
With the shift in strategic focus, JAB reportedly also will eventually put its Belstaff luxury jacket label on the block.
Jimmy Choo is for sale at a time when the fashion and luxury industry is being upended by consumers increasingly shifting their purchases online. In the US, it’s also being disrupted by declining department store and mall traffic and a spending shift toward eating out and other experiences over buying material things. Indeed, the US Commerce Department’s March retail sales report showed that food services and drinking places sales in the first three months of this year rose 3%, while department store sales slid 6.6% and clothing and fashion accessories stores sales fell 2.6%.
The change has led to a wave of store closings, bankruptcies and consolidations. Some deals aim to pick up hip new brands, while others are designed to cut costs to achieve so-called synergies in marketing, HR and other back-house functions. A recent PwC study showed that Q1 2017 US M&A deals activity reached the highest level in the past 10 years.
Indeed, the PwC study showed both the apparel, footwear and accessories segment as well as the ecommerce sectors are among hot M&A zones, following the flurries of activities in the food/beverage and restaurant sectors.
A case in point, luxury retailer Neiman Marcus and upscale label Kate Spade have both put themselves up for sale, with rivals Coach and Michael Kors both said to be in the bidding for Kate Spade. (Coach, for its part, has credited its acquired luxury shoe label Stuart Weitzman in helping to contribute to a positive sales turnaround.)