Jimmy Choo buys back Korean and Dubai franchises
After spending three years expanding in China, British luxury shoe-maker Jimmy Choo has set its sights on the Middle East and Korea where it has entered into major partnerships with local distributors, its chief executive told Fashion Network in an exclusive interview.
Founded in the 1990s by Jimmy Choo, a Malaysian bespoke shoe maker in London's East End, Jimmy Choo is known for its £500 stilettos popularized by the US TV series Sex and the City in the US and Korean TV show "My love from the star." The brand’s focus, which up until now had been on the US, Britain, Japan and China, is now building a bigger presence in Korea and the Middle East as part of its ambition to generate sales of 500 million pounds sterling by 2020, up from 282 million in 2013.
“These are very important new markets for us,” Pierre Denis told Fashion Network on the fringes of the Condé Nast International luxury conference in Muscat, Oman. Denis, a seasoned fashion executive, used to work at Dior and run sister brand John Galliano before taking the executive reins of Jimmy Choo in 2012 and investing some of his personal funds in the brand.
Denis said Jimmy Choo had bought back franchises in Korea and Dubai and created joint-ventures with local distributors in these two markets, Huyndai and Al Tayer respectively. Al Tayer, a rival of luxury distributor Chalhoub Group, runs Bloomingdale’s and Harvey Nichols in Dubai and launched an online fashion e-commerce website called Ounass in December that aims to rival Net-A-Porter in the Gulf region.
Jimmy Choo is one of many luxury brands that have been switching from wholesale franchise distributors to joint-venture deals with local partners to better control stock, image and pocket distribution margins.
The partnerships in Korea and the Middle East will give the brand 18 new directly-operated stores once they become effective in July. Jimmy Choo, which runs a network of 150 directly-operated boutiques, has potential to raise that number to 200 by 2020, Denis said.
Jimmy Choo had spent tens of millions of euros in the past three years on refurbishing around 60 percent of its directly-controlled shops and has opened around 20 boutiques in China. The brand is also investing heavily in building its own internal e-commerce operations and digital presence on social networks such as Instagram, for which it has more than 6.2 million followers.
Jimmy Choo’s creative director is Sandra Choi, the niece of founder Jimmy Choo’s wife Rebecca. Under her watch, Jimmy Choo has attired a slew of Red Carpet stars including Marion Cotillard, Kate Winslet, Halle Berry, Sandra Bullock and Cate Blanchett; and been awarded Designer Brand of the Year from the British Fashion Council and ACE Brand of the Year from the Accessory Council, both in 2008.
Denis said the company was on track to deliver like-for-like growth at constant exchange rates in mid-single-digit terms after a difficult 2016, during which sales growth hovered at around 2 percent, hit by low footfall in US department stores and a drop in tourist demand.
“We have had an excellent start for 2017 with solid-like-for-like growth and I am optimistic about the rest of the year,” Denis said.
The designer footwear market has been one of the most crisis-resistant sub-categories of the luxury goods industry, with annual sales forecast to reach nearly $32 billion by 2018, up from $27.4 billion in 2015, according to market research firm Euromonitor. Jimmy Choo, which competes with big listed brands such as Salvatore Ferragamo and Prada, is one of the market’s leading specialized upmarket shoe makers with an estimated 3 percent share of the global, highly fragmented market.
After several private equity owners, Jimmy Choo was acquired in 2011 for more than 500 million pounds by the Joh. A. Benckiser (JAB) family office which is a controlling shareholder of US cosmetics giant Coty and has a very large coffee production business which includes the group Jacobs Douwe Egberts. In 2014, a 30 percent stake in Jimmy Choo was floated on the London Stock Exchange. But due to the small number of Jimmy Choo shares freely traded, many big investment funds have not been able to buy stock due to their own internal restrictive guidelines.
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