Apr 15, 2014
Labelux aims for Jimmy Choo share offer this autumn-sources
Apr 15, 2014
Paris, France - Privately owned luxury group Labelux has hired Bank of America Merrill Lynch to advise it on a possible London market flotation of Jimmy Choo this autumn that could value the upmarket shoemaker at over 900 million pounds ($1.5 billion), industry and financial sources said.
Market conditions permitting, the listing could take place towards the end of the autumn, in November, with Labelux seen selling a 25 percent stake, the sources said. Merrill Lynch declined to comment.
Labelux is owned by Joh. A. Benckiser (JAB), the investment holding company of the Reimanns, the German billionaire family associated with Reckitt Benckiser, the cleaning and household products maker.
JAB still owns 10.6 percent of Reckitt Benckiser and with associates over 70 percent of fragrances and beauty products company Coty, which last year netted JAB nearly $800 million from its IPO in New York.
Labelux acquired Jimmy Choo in 2011 for more than 500 million pounds ($837 million) from investment firm TowerBrook Capital Partners and hopes that the name, its growth track record and prospects in new markets will attract investors. Jimmy Choo stilettos have been endorsed by a variety of celebrities such as Sarah Jessica Parker, who famously mentioned them in the Sex and the City TV series.
Jimmy Choo is part of a rapidly growing list of companies eyeing an initial public offering in London. If it goes ahead, it would be the most significant luxury goods IPO since the Milan listing of Moncler in December, which valued the Italian down jacket maker at 2.55 billion euros ($3.52 billion).
Moncler's IPO valued it at 12 times forward earnings before interest, tax, depreciation and amortisation.
Industry sources said Jimmy Choo could hope to get a valuation of at least 13 times EBITDA as its closest peer, Italy's Salvatore Ferragamo, also focused on shoes, was trading on 13 times forward underlying earnings.
The British brand was founded in the 1990s by Jimmy Choo, a Malaysian bespoke shoemaker in London's East End, who developed the business with Tamara Mellon and help from her father Tommy Yeardye, who co-founded the Vidal Sassoon hairdressing chains.
While Mellon and Chief Executive Joshua Schulman left shortly after Labelux acquired the brand, Jimmy Choo's niece Sandra Choi is still the brand's creative director.
Proceeds from the flotation would be used to finance the development of Labelux's remaining luxury brands, particularly lossmaking British motorbike-inspired fashion brand Belstaff and Swiss leather goods maker Bally, the sources added.
"The idea is to have access to public markets, and the proceeds would be ploughed into the Labelux group, not so much in Jimmy Choo, which is well funded, but in the group's other brands," a source close to JAB said.
Bally, which has been struggling to find its direction, last year hired Frederic de Narp, a former Richemont group veteran to craft its strategy, aided by creative director Pablo Coppola who was previously with Tom Ford and Christian Dior.
JAB'S LUXURY BRANDS INTEREST
With Labelux mulling a flotation of its prized asset there has been a suggestion by some fashion industry executives and bankers that JAB's interest in its luxury business might be waning, having not bought any brand since Belstaff in June 2011.
"There were a lot of luxury labels that went up for sale in the past few years that did not require fortunes to buy them, but they (Labelux) did not touch them," one London-based banker specialising in luxury goods said.
Labelux was offered several potential targets such as Italian tailor Brioni and jeweller Pomellato but let both brands fall into the hands of Gucci's owner Kering, for example, the banker said.
But the source close to JAB said Labelux would return to the acquisition trail once it had sorted out internal issues such as hiring a new CEO for Belstaff, deciding on Jimmy Choo's flotation and making progress with Bally's turnaround.
"The group will be looking at buying more companies once it has consolidated what it already has," the source said, adding that it would decide by the summer on the IPO.
Since it was created in 2007 Labelux has lost many of the original management and creative teams it took on.
At Belstaff Harry Slatkin, who made his name in scented candles, left last year as chief executive but still retains a small stake in the brand with long-time friend Tommy Hilfiger, who had been brought in as a consultant.
Belstaff, a once-dormant outerwear company founded in 1924, has invested vast sums in flagship stores and brand ambassadors such as actor Ewan McGregor and footballer David Beckman but still needs to fine-tune its strategy, fashion industry executives and consultants say.
Meanwhile JAB has shown more interest in coffee than beauty or luxury in the last two years, acquiring Caribou Coffee Company for $340 million, Peet's Coffee & Tea for $1 billion and D.E. Master Blenders 1753, owner of Douwe Egberts coffee, for about 7.5 billion euros.
In 2012 Labelux sold two brands back to their original owners, jeweller Solange and fashion brand Derek Lam.
"There are more opportunities for consolidation in luxury and in coffee than there are in beauty," the source close to JAB said.
Labelux declined to comment for this story.
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