On Tuesday, American fashion house Michael Kors announced plans to buy high-end shoe brand Jimmy Choo for a reported $1.2 billion.
This is the label’s latest move in an effort to expand its growth into an international luxury group.
Founded by namesake designer Jimmy Choo and Tamara Mellon in 1997, the accessories brand quickly rose to notoriety through strong designs and game-changing media placements with shows like Sex and the City. Celebs like Beyonce, Donald Glover, Idris Elba and Taraji P. Henson have helped catapult the brand to legendary status.
For Jimmy Choo, the acquisition brings in added funding for expansion, rejuvenation and diversification of its offerings. Michael Kors, on the other hand, will gain some much needed cache in the luxury space, while allowing the American brand known for its handbags to tap into the accessories giant’s shoe expertise. This is extremely beneficial in a time when handbags aren’t leading sales in the luxury space.
If not properly executed, the acquisition could result in a major loss for Jimmy Choo. Over the years, Michael Kors has struggled to get consumers to buy merchandise at full price and has been accused of over-saturating the market. The best plan of attack for the two brands would be to keep them separate while maintaining Jimmy Choo’s aspirational aesthetic.
Will Michael Kors Holdings become the next Kerning or LVMH? How will the public take this acquisition? Will retail locations be affected? In an era when consumer brand loyalty is pretty much nonexistent, only time will tell if this move will result in a major payoff or not.