Jimmy Choo Ltd. plans an initial public offering in London next month, betting that consumer demand for its $1,995 Lust peep-toe sandals can draw investors as larger luxury companies confront slumping demand in Asia.
Owner JAB Holdings is seeking to sell at least 25 percent of Jimmy Choo, aiming for a stock market debut at the end of October, the London-based shoemaker said today in a statement. The company is seeking a valuation of about $1 billion, people familiar with the situation have previously told Bloomberg News, asking not to be identified because it was confidential.
Jimmy Choo is pursuing an IPO as unfavorable exchange rates and a general fall in consumption take a toll on luxury groups such as LVMH Moet Hennessy Louis Vuitton SA (MC), the world’s biggest. Prada SpA last week reported its slowest revenue growth in three years. The Bloomberg Industries luxury peer group has fallen 8.5 percent this year.
“The market is difficult for some companies that have been in China for a long time,” Jimmy Choo Chief Executive Officer Pierre Denis said on a call with reporters. “There are still opportunities for specialist brands.”
Choo’s revenue is growing at a high double-digit pace in China, where it aims to expand, and more than 20 percent in Japan, according to Denis. The company, whose shoes were made famous by the character Carrie Bradshaw in “Sex and the City,” benefits from high awareness and limited distribution in Asia, where consumers are tiring of widely distributed brands, according to Neev Capital.
Jimmy Choo would follow luxury companies including Moncler SpA (MONC) and Brunello Cucinelli SpA (BC) in selling a stake on European stock markets in the last two years. Choo, which was acquired by private-equity investors three times before being bought by JAB for more than 500 million pounds ($818 million) in 2011, sells women’s and men’s shoes, handbags and accessories in more than 100 stores worldwide. IPOs in London have raised about $24 billion this year, the most since 2007.
Jimmy Choo’s adjusted earnings before interest, taxes, depreciation and amortization rose about 1.7 percent to 46.9 million pounds in 2013 as revenue rose 16 percent to 281.5 million pounds. Revenue grew 7.1 percent on a like-for-like basis, the company said.
First-half sales growth slowed to 2.2 percent on a like-for-like basis, though an acceleration at the start of the second part of the year is encouraging, the shoemaker said. First-half adjusted Ebitda was 27.6 million pounds.
JAB reorganized its business in June, bringing brands including Choo and jacket-maker Belstaff under direct management in a move it said reflected an increasing commitment to luxury goods. Choo has debt of 130 million pounds, Denis said.
The shoemaker’s namesake designer left in 2001, followed by co-founder Tamara Mellon a decade later.
JAB isn’t issuing any new shares. Bank of America Corp.’s Merrill Lynch International is organizing the sale as sole sponsor and global coordinator. Merrill and HSBC Bank Plc are joint bookrunners and BHF-Bank is co-lead manager.