On Monday, luxury shoe company Jimmy Choo announced that it is putting itself up for sale and seeking a new buyer. Shares of Jimmy Choo, which trade on the London Stock Exchange under the ticker “CHOO,” surged about 10% today on the news.
JAB Holdings, which currently holds a 67.6% stake in Jimmy Choo, acquired the brand back in 2011 for £540 million, or $800 million at the time, and then took the company public in 2014. But JAB, a privately-held business group, has built its brand portfolio around coffee and food companies rather than luxury accessories. JAB owns American coffee giants like Peet’s Coffee & Tea, Caribou Coffee, and Keruig Green Mountain, and just agreed to purchase café and sandwich chain Panera Bread (NASDAQ:PNRA) for $7.5 billion.
According to the New York Times, JAB is also considering a “strategic review” of its Swiss leather goods brand Bally, and potentially Belstaff, a British motocross-inspired brand it acquired back in 2008, could follow.
JAB, then, if it gets rid of its luxury stakes, would be entirely out of the fashion industry. Over the last few years, the luxury retail industry has experienced slowed growth and changing consumer preferences, and if JAB exits, that would leave the “Big Three”: LVMH Moet Hennessey, Louis Vuitton, Richemont, and Kering (PA:PRTP).
Founded in 1996 by designer Jimmy Choo and former Vogue accessories editor Tamara Mellon, Jimmy Choo is a luxury staple in the fashion industry. A pair of its heels can easily sell for over $1,000, but that price point didn’t stop the brand’s soaring popularity over the years, even appearing in movies and TV shows like The Devil Wears Prada and Sex and the City.
Interested in the luxury retail industry? Listen to this episode of the Zacks Shopping for Stocks, where editor Maddy Johnson takes a look at the struggling luxury market.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple (NASDAQ:AAPL)'s 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Panera Bread Company (PNRA): Free Stock Analysis Report
Original post
Zacks Investment Research