Promising signs of growth
Jimmy Choo doesn’t want to play second fiddle within the Capri Holdings universe. The luxury shoe brand is indeed showing signs of growth, as explained by the CEO of the American group, John Idol, at the Citi Global Consumer & Retail Conference, according to WWD. The executive 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 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,” Idol explained. “Thinking of Jimmy Choo only for glamorous events, parties, or weddings was limiting,” he emphasized. “Now, the marketing targets more everyday situations.”
Distribution Network Optimization and Profitability
In terms of distribution, Jimmy Choo currently operates 230 stores worldwide. This number is expected to be reduced to around 200 over time, with the aim of improving the retail network’s productivity. The brand, which previously 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%. Among the growth drivers is also 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 propel 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 reiterated 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 Raises Its Annual Forecast
Meanwhile, Capri Holdings reported its third-quarter results last February, marking the sixth consecutive quarter of declining sales for Michael Kors. 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. Market outlook, however, improved slightly following an upward revision of annual forecasts, now ranging from $3.45 billion to $3.48 billion, compared to a previous estimate of $3.38 billion to $3.45 billion.