U.S. retailer Michael Kors has agreed to buy luxury shoemaker Jimmy Choo for $1.2 billion, snapping up a British brand launched in the east end of London and made famous by celebrity fans including Princess Diana. Scarlett Cvitanovich reports.
Will the shoe fit for U.S. retailer Michael Kors? The company announcing on Tuesday it's bought luxury British brand Jimmy Choo.... And like the heels, the price was high. Snapped up for 1.2 billion dollars. The sale sending the shoemaker's shares soaring 17-percent to a record high. Founded in the 1990s in eastern London by its namesake Jimmy Choo.... It's known for its sky scraper heels and celebrity following. Adorning shop windows in cities from London to Paris, New York and Tokyo. The 'it' brand made the announcement it was putting itself up for sale in April... When its majority owner JAB signaled its intention to focus on consumer goods. (SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "The major shareholder in Jimmy Choo wanted to focus on other areas away from luxury retail as we saw when they put it up for sale in April. I think they've got a nice premium on the share price when the offer was made. As far Michael Kors is concerned, who wouldn't want to add, if you're looking to expand into the luxury market, a brand such as Jimmy Choo which has been so innovative over the last 20 years, I do think it's a good deal all around." Cue Michael Kors stepping into the spotlight. Once the hottest name in affordable luxury with a hugely popular handbag range.... In recent quarters it's struggled. Suffering from declining same-store sales as fewer people make the trip to the shops. It's fought the decline by expanding into dresses and menswear, and investing in its online business. At this stage it says it has no plans to shake-up the Jimmy Choo brand.... Stating it would continue to operate as it does today, under its existing management team. The sale is expected to close towards the end of this year.