In a desperate attempt to remain relavant in the aspirational retail space Michael Kors has a $1.2 billion deal for Jimmy Choo.
Michael Kors, suffering from huge price discounting, in May announced a turnaround plan where the company said it would close 125 stores and slash the number of its luxury handbags for department stores.
The Jimmy Choo brand of designer shoes has seen a similar sales drop off in the US as the European investment fund JAB Holding put the label on the block. Jimmy Choo’s sales are still strong in Asia, where Michael Kors eyes further expansion.
The deal is a response to the purchase in May by Coach of Kate Spade for $2.4 billion.
All four of the aspirational brands have suffered over the last year or so as US shoppers no longer see the brands as unique since they could be found widely from luxury shops to discount department stores. The plan was to mimic the Ralph Lauren — multiple fashion lines at differing price points — did not transfer well to handbags and shoes.