Big news in fashion investment circles over the weekend has been the sale of Jimmy Choo to Towerbrook Partners, a private equity firm that has bought out the state owned by Lion Capital. Here is an article from the Financial Times announcing the deal. More thoughts on this later.
Jimmy Choo sells for £185m
By Peter Smith,Private Equity Correspondent
Published: February 3 2007 02:00 | Last updated: February 3 2007 02:00
Jimmy Choo, the fashionistas' favourite shoemaker, has been sold by its private equity owner Lion Capital in a deal worth £185m.
The sale will result in a gain of close to £25m for Tamara Mellon, the company president and joint founder who owns just over 15 per cent, although she will invest part of those proceeds alongside new Jimmy Choo owner TowerBrook, the private equity group that was part of financier George Soros's empire.
TowerBrook has been in talks with Lion Capital to buy the iconic brand since November.
Lion Capital bought a majority stake in Jimmy Choo just over two years ago. It is likely to generate a multiple of 2.25 on its original equity investment. At the time of the Lion deal, Jimmy Choo was valued at just over £100m - close to five times what it was worth just three years earlier.
The private equity group, which separated from US parent Hicks Muse Tate & Furst in 2004, is understood to be close to raising a new buy-out fund of just over €2bn (£1.31).
Since it bought the retailer, Lion has expanded its outlets from 23 to more than 60, setting up in many of Europe's biggest capitals and in London's Sloane Street and Bond Street.
The new owners are keen to expand Jimmy Choo into Asia.
A ready-to-wear pair of Jimmy Choo shoes, which can cost more than £500, has achieved cult status in recent years. They are worn by celebrities, including actress Renee Zellweger, while Lady Tamara Grosvenor, a member of one of Britain's richest families, favoured them for her wedding to Edward van Cutsem.
Jimmy Choo's chief executive is Robert Bensoussan, the French luxury goods executive who helped Burberry relaunch its brand.
Jimmy Choo was established in 1996 by Malaysian-born cobbler Jimmy Choo, Tamara Mellon and Tom Yeardye.
In 2006, the company was forecast to sell 210,000 pairs of shoes and 50,000 bags.
Lion Capital is a specialist investor in branded consumer product businesses. It also owns the Weetabix, the highly cash-generative cereals group that will shortly undergo a third refinancing. Last year it bought Kettle Chips for close to $300m (£153m).
Copyright The Financial Times Limited 2007