On Tuesday, Michael Kors Holdings said it had agreed to buy the shoe company Jimmy Choo for 896 million pounds, or about $1.2 billion.
The British firm, which was put up for sale in April, attracted attention from a number of potential buyers.As well as shoes, Jimmy Choo produces a range of luxury goods.
Though both brands are red-carpet favorites, they appeal to different segments of the population.
Michael Kors, known for fashion-forward designs and competitive prices, is heavily reliant on outlets and department stores, where deep discounting is common.
Jimmy Choo occupies a higher price point: open-toe slip-on sandals sell for $425, while crystal-encrusted shoes with the brand’s signature sky-high stilettos go for nearly $3,000.
Michael Kors describes itself as a luxury brand, and, like Jimmy Choo, it is named after its founder and creative force. Recent years have been a struggle for the company, its most recent same-store sales figures were down 14%.
Many upscale brands like Michael Kors have faced plummeting sales and tepid profits. Michael Kors said the acquisition was expected to deliver a number of benefits, including “the opportunity to grow Jimmy Choo sales to one billion dollars” and “a more balanced portfolio with greater product diversification”.
It said Jimmy Choo would also have the opportunity to grow in the men’s luxury footwear category, as well as greater exposure to global markets, “particularly the fast-growing market in Asia”.
The deal would mark the first time Jimmy Choo has been owned by a company with expertise in fashion.