Say it isn’t so!
The Reimann family, the reclusive German consumer goods billionaires who control JAB Holding are shifting priorities. The luxury shoe brand (our beloved) Jimmy Choo has announced that it was putting itself up for sale.
JAB owns 67.6 percent stake on Jimmy Choo which they acquired in 2011 for 540 million pounds or roughly $800 million then took it public in 2014. JAB is also undertaking what it called a strategic review of the Swiss leather goods brand Bally, “including a possible sale of the company.” A review of Belstaff, the British motocross-inspired brand acquired in 2008, is expected to follow. The possible sell-off of the luxury brands comes as JAB Holdings, which since 2012 has built a coffee and food empire in the US by acquiring American coffee brands which include Peet’s Coffee & Tea, Caribou Coffee and Keurig Green Mountain, agreed this month to buy the sandwich chain Panera for $7.5 billion which also includes debt.
According to documents scrounged up by several online sources, JAB has made significant investments in coffee and related areas in recent years and, as a result, now considers its investment in luxury as non-core.
JAB, which has its headquarters in Luxembourg, wants to focus on its investments in Coty, in which it has a 36.84 percent stake, and the numerous high-end coffee businesses, which also include Stumptown Coffee Roasters and Intelligentsia Coffee & Tea.
Shedding its investments in the three leather-goods companies would take JAB out of the fashion industry, ending an eight-year effort to build a viable luxury group to compete with the Big Three — LVMH Moët Hennessy Louis Vuitton, Richemont and Kering — and possibly signaling further consolidation in an industry already wrestling with slowing growth and changing consumer tastes. The strategy shift also speaks to the increasing desire of consumers to spend money on experience — including on morning drinks of choice — instead of, say, handbags.
JAB entered the luxury market with fanfare in 2007 and soon snatched up brands such as the American-based designer Derek Lam; the Italian handbag label Zagliani (which was known back then for using Botox in its exotic-skin totes and purses to keep them supple), the British jeweler Solange Azagury-Partridge; and leather-goods names like Jimmy Choo, Bally and Belstaff, all under a new division called Labelux.
Only four years later, however, it sold its stakes in the Lam and Azagury-Partridge businesses to the brands’ founders, and in 2014 decided to refocus on leather goods, bringing the remaining brands directly under the control of JAB Holding (it closed Zagliani in 2015).
Jimmy Choo joins the likes of other luxury brands to be listed on the public market, riding a wave of accessories successes. Bally struggled to define itself in a crowded market, taking tentative steps in apparel without much impact. Belstaff, too, despite a much heralded campaign with David Beckham, found it difficult to break through.
Now, that grand experiment is apparently at an end.
According to the JAB announcement, there have not been any bids so far for Jimmy Choo, but the industry is bound to be watching closely for declarations of intent. This is especially the case given that footwear is something of a buzzing industry which department stores looking to compete over who can open the largest shoe floor. This title is now held by the Level Shoe District in Dubai, at 96,000 square feet (impressive!).
Indeed, since the news broke, the price of Jimmy Choo shares has climbed more than 9 percent. So what does this mean for us Jimmy Choo die-hards? It seems that only time will tell if there’s going to be a white knight to sweep JC off its feet and care for it like it deserves!