Promising Signs of Growth
Jimmy Choo has no intention of playing second fiddle within the Capri Holdings universe. The luxury shoe brand is indeed showing signs of growth, as the CEO of the U.S. group, John Idol, explained at the Citi Global Consumer & Retail Conference, according to WWD. Idol noted that the brand—which was the subject of rumors of an imminent sale a few months ago—could close out its third consecutive quarter of comparable sales growth. Meanwhile, the wholesale channel posted what were described as “very strong” results, with the brand growing by more than 20% in North America during the last quarter. “We’re on the right track with Jimmy Choo,” Idol said.
The shoe brand, which currently generates approximately $800 million in revenue (about 736 million euros at the current exchange rate), could continue to grow if the current trend holds. “I think that if we manage to maintain this pace of growth, the results could be even more significant,” added the executive, one of the key figures behind the historic sale of Versace to the Prada Group.
A New Marketing Strategy
Part of the strategy now involves repositioning the brand’s image and making greater use of social media and influencers—an approach already tested with the Michael Kors brand (the group’s flagship label). “We really have a new vision of who the Jimmy Choo woman is: she’s a woman with natural, effortless charm,” explained Idol. “Thinking of Jimmy Choo only in terms of glamorous events, parties, or weddings was limiting,” he emphasized. “Now, our marketing is targeting more everyday situations.”
Optimizing the Distribution Network and Profitability
On the distribution front, Jimmy Choo currently has 230 stores worldwide. This number is expected to be reduced to around 200 over time, with the goal of improving the retail network’s productivity. The brand, which in the past posted double-digit operating margins, is reportedly currently operating at a slight loss (in the last quarter, revenue rose 5% to $167 million), but Capri aims to bring profitability back to between 10% and 15%. Another key driver of growth is the expansion of the accessories category, which currently accounts for about 25% of the business but could potentially reach around 40%, as the CEO considers it more profitable than footwear.
Jimmy Choo Is Not for Sale
Capri Holdings acquired Jimmy Choo in 2017 for $1.2 billion, stating at the time that the deal could lead the brand to $1 billion in revenue, as the American newspaper notes. And while, as mentioned earlier, rumors have circulated in recent months about a possible sale of the brand, John Idol has reaffirmed that it is not for sale: “We consider it an extraordinary asset for us, and our goal is to continue growing this brand.”
Capri Holdings Revises Annual Forecasts Upward
Meanwhile, Capri Holdings closed its third quarter last February—the sixth consecutive quarter in which Michael Kors reported a decline in sales. This resulted in the brand’s revenue falling by 5.6% at current exchange rates and 7.3% at constant exchange rates, totaling $858 million (€727 million) for the quarter ended December 27. However, the market outlook improved slightly following an upward revision of the annual guidance, which now ranges from $3.45 billion to $3.48 billion, compared with a previous estimate of $3.38 billion to $3.45 billion.