Acquisition of iconic brand expands leadership position in the global
fashion luxury segment and strengthens future growth opportunities
LONDON--(BUSINESS WIRE)--
Michael Kors Holdings Limited (NYSE:KORS), a global fashion luxury
brand, today announced that it has reached an agreement to acquire Jimmy
Choo PLC (LON:CHOO), a premier global luxury footwear and accessories
brand. Under the terms of the transaction, Jimmy Choo shareholders will
receive 230 pence per share, with an enterprise value of approximately
USD $1.350 billion. The transaction has been approved by the Boards of
Directors of both Michael Kors and Jimmy Choo.
John D. Idol, Chairman and Chief Executive Officer of Michael Kors,
said, “We are pleased to announce the acquisition of Jimmy Choo, an
iconic brand with a rich history as a leading global luxury house. Jimmy
Choo is known worldwide for its glamorous and fashion-forward footwear.
The company is a leader in setting fashion trends. Its innovative
designs and exceptional craftsmanship resonate with trendsetters
globally. We believe that Jimmy Choo is poised for meaningful growth in
the future and our company is committed to supporting the strong brand
equity that Jimmy Choo has built over the last 20 years.”
Mr. Idol continued, “Pierre Denis will continue in his role as Chief
Executive Officer of Jimmy Choo. He has led the company since 2012,
during which time Jimmy Choo experienced compounded sales growth of 11%
annually. Pierre brings more than 25 years of experience and a strong
track record with global fashion luxury brands. Additionally, Creative
Director Sandra Choi will continue to lead the creative and design teams
at the company. Sandra has been with Jimmy Choo since its inception and
has been the sole Creative Director since 2013. Her groundbreaking
vision and fashion artistry have created a truly iconic and
internationally recognized luxury brand. Mr. Denis, Ms. Choi and the
rest of the highly-talented management team have done a tremendous job,
and this continuity of leadership will ensure that the DNA of Jimmy Choo
is maintained as we work together to continue to grow the brand
globally.”
Michael Kors, Honorary Chairman and Chief Creative Officer of Michael
Kors, said, “Jimmy Choo is a premier fashion luxury house that offers
distinctive footwear, handbags and other accessories. We admire the
glamorous style and trendsetting nature of Jimmy Choo designs. We look
forward to welcoming Jimmy Choo to our luxury group.”
Pierre Denis, Chief Executive Officer of Jimmy Choo, said, “It is a
privilege for our management team to lead Jimmy Choo and to preside over
such an exciting period for our company. We are convinced that there is
so much more that can be delivered in the years ahead. We look forward
to working closely with the leadership and team at Michael Kors Holdings
Limited to further develop our iconic brand. Our two companies share the
same vision of style and trend leadership. Our luxury heritage is the
foundation of Jimmy Choo and we will continue to bring our brand vision
to consumers globally.”
Iconic and Powerful Luxury Brand
Jimmy Choo is a luxury accessories brand that offers an empowered sense
of glamour and a playfully daring spirit. Since its inception in 1996,
the company has offered distinctive, glamorous and fashion-forward
products, with luxury footwear at the heart of its unique brand DNA. The
brand began as a bespoke atelier that catered to the global luxury
consumer, and continues to be popular with style icons around the globe,
including celebrities, royalty, musicians and heads of state. Jimmy Choo
offers exceptionally crafted products of the highest quality, with a
design team that is at the forefront of interpreting fashion trends in
footwear and accessories. The collections reflect a mix of iconic,
timeless products that appeals to a broader audience, as well as
innovative offerings that are targeted to fashion trendsetters globally.
With approximately 150 company-operated retail stores, 560 multi-brand
doors and more than 60 franchise stores in premier locations worldwide,
Jimmy Choo has a successful, balanced distribution network. The company
has a strong presence in Europe, the Middle East, the Americas and Asia.
In addition, Jimmy Choo continues to invest significantly in its online
platform, which has experienced strong revenue growth in recent years.
The company also continues to build its presence in accessories and
men’s footwear. The brand has a natural authority in men’s evening
shoes, adding a twist to classic shapes, and has also seen strong growth
in luxury active footwear. By integrating a dual gender product
portfolio into its retail stores, Jimmy Choo expects to unlock
additional value from this fast growing segment of the business.
Strategic Rationale
The acquisition of Jimmy Choo is expected to deliver a number of
benefits, including:
-
The opportunity to grow Jimmy Choo sales to $1 billion
-
A more balanced portfolio with greater product diversification
-
An enhanced positioning in the attractive and growing luxury footwear
segment
-
The opportunity to grow in the men’s luxury footwear category
-
Further expansion in the luxury accessories market
-
Greater exposure to global markets, particularly the fast-growing
market in Asia
-
The potential to create long-term operational synergies
Transaction Details
The transaction is not subject to a financing condition. Michael Kors
has committed bridge financing from JPMorgan Chase Bank, N.A. and
Goldman Sachs Bank USA to satisfy the certain funds requirement of the
U.K. Takeover Code to complete the transaction. The transaction is
intended to be effected by a U.K. court-approved Scheme of Arrangement
(the “Scheme”) and is expected to close in the fourth quarter of
calendar 2017, subject to customary closing conditions, including the
receipt of required regulatory approvals as well as the approval of the
Scheme by Jimmy Choo shareholders, who together hold at least 75% of the
issued share capital of Jimmy Choo and represent a majority of the
shareholders voting at the meeting. Michael Kors has received
irrevocable undertakings from JAB Luxury GmbH, Jimmy Choo directors and
Sandra Choi, who collectively represent 69.21% of the issued and
outstanding Jimmy Choo shares in support of the transaction.
Financial Considerations
Michael Kors Holdings Limited believes that the acquisition enhances the
company’s economic value and will drive improved long-term shareholder
value. The acquisition is expected to be accretive on a GAAP basis in
fiscal 2020.
Conference Call and Additional Information
Michael Kors will host a conference call to discuss the transaction at
8:00 a.m. ET today, July 25, 2017. A live webcast of the conference call
will be available in the investor relations portion of the Company’s
website, www.investors.michaelkors.com.
For additional information concerning the transaction, please see the
investor presentation available on the Investor Relations page of the
Michael Kors website at www.investors.michaelkors.com
as well as the Rule 2.7 announcement available on the Michael Kors
website at and on the Jimmy Choo website at http://www.jimmychooplc.com/investors/strategic-review-documents-announcements.
For the avoidance of doubt, the contents of those websites are not
incorporated into and do not form part of this press release.
About Michael Kors
Michael Kors is a world-renowned, award-winning designer of luxury
accessories and ready-to-wear. His namesake company, established in
1981, currently produces a range of products under Michael Kors
Collection, MICHAEL Michael Kors and Michael Kors Mens, including
accessories, ready-to-wear, footwear, wearable technology, watches, and
a full line of fragrance products. Michael Kors stores are operated in
the most prestigious cities in the world. In addition, Michael Kors
operates digital flagships across North America, Europe and Asia,
offering customers a seamless omni-channel experience. Michael Kors
Holdings Limited is publicly listed on the New York Stock Exchange with
the ticker KORS.
About Jimmy Choo
Jimmy Choo encompasses a complete luxury accessories brand. Women’s
shoes remain the core of the product offering, alongside handbags, small
leather goods, scarves, sunglasses, eyewear, belts, fragrance and men’s
shoes. CEO Pierre Denis and Creative Director Sandra Choi together share
a vision to create one of the world’s most treasured luxury brands.
Jimmy Choo has a global store network encompassing more than 150 stores
and is present in the most prestigious department and specialty stores
worldwide. Jimmy Choo PLC is publicly listed on the London Stock
Exchange with the ticker CHOO.
Forward-Looking Statements
This press release contains statements which are, or may be deemed to
be, “forward-looking statements”. Forward-looking statements are
prospective in nature and are not based on historical facts, but rather
on current expectations and projections of the management of Michael
Kors and Jimmy Choo about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. The forward-looking statements contained in
this press release include statements relating to the expected effects
of the acquisition on Michael Kors and Jimmy Choo, the expected timing
and scope of the acquisition and other statements other than historical
facts. All statements other than statements of historical facts included
in this press release may be forward-looking statements. Without
limitation, any statements preceded or followed by or that include the
words “targets”, “plans”, “believes”, “expects”, “aims”, “intends”,
“will”, “should”, “could”, “would”, “may”, “anticipates”, “estimates”,
“synergy”, “cost-saving”, “projects”, “goal”, “strategy”, “budget”,
“forecast” or “might” or, words or terms of similar substance or the
negative thereof, are forward-looking statements. Forward-looking
statements include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, economic
performance, indebtedness, financial condition, dividend policy, losses
and future prospects; (ii) business and management strategies and the
expansion and growth of Jimmy Choo’s and Michael Kors’ operations and
benefits from the acquisition; and (iii) the effects of government
regulation on Michael Kors’ or Jimmy Choo’s business. These
forward-looking statements are not guarantees of future financial
performance. Such forward-looking statements involve known and unknown
risks and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many risks, uncertainties and
other factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. These risks,
uncertainties and other factors include the satisfaction of the
conditions to consummating the acquisition, Michael Kors’ ability to
integrate the businesses successfully and to achieve anticipated
benefits of the acquisition; the risk of disruptions to Michael Kors’ or
Jimmy Choo’s businesses; the negative effects of the announcement of the
proposed acquisition or the consummation of the proposed acquisition on
the market price of the Michael Kors’ ordinary shares and its operating
results; significant transaction costs; unknown liabilities; the risk of
litigation and/or regulatory actions related to the proposed
acquisition; fluctuations in demand for Jimmy Choo’s and Michael Kors’
products; changes in consumer traffic and retail trends; loss of market
share and industry competition; fluctuations in the capital markets;
fluctuations in interest and exchange rates; the occurrence of
unforeseen disasters or catastrophes; political or economic instability
in principal markets; adverse outcomes in litigation; and general, local
and global economic, political, business and market conditions, as well
as those risks set forth in the reports that Michael Kors files from
time to time with the U.S. Securities and Exchange Commission. Other
unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements. Such
forward-looking statements should therefore be construed in the light of
such factors. Unless otherwise required by applicable law, neither
Michael Kors nor Jimmy Choo, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance
or guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this press release will actually
occur. Due to such uncertainties and risks, readers are cautioned not to
place undue reliance on such forward-looking statements. All subsequent
oral or written forward-looking statements attributable to Michael Kors
or Jimmy Choo or any of their respective members, directors, officers or
employees or any persons acting on their behalf are expressly qualified
in their entirety by the cautionary statement above. Michael Kors and
Jimmy Choo disclaim any obligation to update or revise any
forward-looking or other statements contained herein other than
in accordance with their legal and regulatory obligations.
Important information
This press release is for information purposes only and is not intended
to, and does not, constitute or form part of an offer to purchase or the
solicitation of an offer to sell any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Scheme or
otherwise. The proposed acquisition will be implemented solely pursuant
to the terms of a Scheme Document, which will contain the full terms and
conditions of the proposed acquisition. Any decision in respect of, or
other response to, the proposed acquisition should be made only on the
basis of the information contained in the Scheme Document.
Additional information for US shareholders
The proposed acquisition relates to the shares of an English company and
is expected to be made by means of a scheme of arrangement provided for
under English company law. The proposed acquisition will not be subject
to the tender offer rules or the proxy solicitation rules under the U.S.
Securities Exchange Act of 1934, as amended (the “US Exchange Act”).
Accordingly, the proposed acquisition will be subject to the disclosure
requirements and practices applicable in the United Kingdom to schemes
of arrangement, which differ from the disclosure requirements of U.S.
tender offer and proxy solicitation rules. If, in the future, Michael
Kors exercises the right to implement the proposed acquisition by way of
a takeover offer, the proposed acquisition will be made in compliance
with applicable U.S. laws and regulations, including Section 14(e) of
the US Exchange Act and Regulation 14E thereunder.

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Source: Michael Kors Holdings Limited