Various business gurus have claimed in their books or speeches that to attain success at a stagnant rate, it is necessary to try out new strategies at regular intervals of time. Such decisions are taken after thoroughly analyzing the different results they might yield. As the market is always unpredictable, at times the risk might pay off, or it might even backfire as the market is always unpredictable. Luxury shoe retailer Jimmy Choo has decided to take such a plunge and risk its currently stable business. This London-based company surprised the market on Monday by announcing that it is up for sale. The company further stated that this decision will be carried out after conducting a review of the various options it holds.
Jimmy Choo believes that through such updated strategic options, it can open up new ways for the company which will enable maximizing the value of its shareholders. The shoe and bag brand has become a status symbol due to its extravagant prices and exclusive designs. Due to the tag of being a luxury commodity manufacturer, there is a general conception that business is easy for such a company. Things sound easy and smooth at a tertiary level. Every company needs to strive hard to retain its position of a well-established brand. This is the case with Jimmy Choo as well.
Jimmy Choo’s investor expectations
Jimmy Choo has taken this decision after comprehensively discussing the pros and cons with its majority shareholder, JAB Luxury. The company has confirmed its absolute support for the same. JAB Luxury is liable for 67.7 percent of the shoe retailer’s market value, including more than 150 stores it has worldwide. Jimmy Choo also stated that the Takeover Panel of Britain has agreed to welcome any kind of talks with third parties in relation to the sale of the company. This will encourage interested investors to strike a deal with the company for a formal sale process in a confidential manner. Citi Bank and Bank of America Merrill Lynch have taken up the responsibility to look after the sale process.
Jimmy Choo seems to be an appealing company in terms of takeover as it is globally acclaimed and also attained increase in stock prices recently. In 2014, the company’s share prices were around 140 pence at the London Stock Exchange. But these stock prices have risen by 35 percent in the previous year. The market value on the business as on Friday is $840 million. Such figures clearly show that the investors interested in acquisition will have assured returns.