| PARIS, April 15
PARIS, April 15 Privately owned luxury group
Labelux has hired Bank of America Merrill Lynch to
advise it on a possible London market flotation of Jimmy Choo
this autumn that could value the upmarket shoemaker at over 900
million pounds ($1.5 billion), industry and financial sources
Market conditions permitting, the listing could take place
towards the end of the autumn, in November, with Labelux seen
selling a 25 percent stake, the sources said. Merrill Lynch
declined to comment.
Labelux is owned by Joh. A. Benckiser (JAB), the investment
holding company of the Reimanns, the German billionaire family
associated with Reckitt Benckiser, the cleaning and
household products maker.
JAB still owns 10.6 percent of Reckitt Benckiser and with
associates over 70 percent of fragrances and beauty products
company Coty, which last year netted JAB nearly $800
million from its IPO in New York.
Labelux acquired Jimmy Choo in 2011 for more than 500
million pounds ($837 million) from investment firm TowerBrook
Capital Partners and hopes that the name, its growth track
record and prospects in new markets will attract investors.
Jimmy Choo stilettos have been endorsed by a variety of
celebrities such as Sarah Jessica Parker, who famously mentioned
them in the Sex and the City TV series.
Jimmy Choo is part of a rapidly growing list of companies
eyeing an initial public offering in London. If it goes ahead,
it would be the most significant luxury goods IPO since the
Milan listing of Moncler in December, which valued the
Italian down jacket maker at 2.55 billion euros ($3.52 billion).
Moncler's IPO valued it at 12 times forward earnings before
interest, tax, depreciation and amortisation (EBITDA).
Industry sources said Jimmy Choo could hope to get a
valuation of at least 13 times EBITDA as its closest peer,
Italy's Salvatore Ferragamo, also focused on shoes,
was trading on 13 times forward underlying earnings.
The British brand was founded in the 1990s by Jimmy Choo, a
Malaysian bespoke shoemaker in London's East End, who developed
the business with Tamara Mellon and help from her father Tommy
Yeardye, who co-founded the Vidal Sassoon hairdressing chains.
While Mellon and Chief Executive Joshua Schulman left
shortly after Labelux acquired the brand, Jimmy Choo's niece
Sandra Choi is still the brand's creative director.
Proceeds from the flotation would be used to finance the
development of Labelux's remaining luxury brands, particularly
lossmaking British motorbike-inspired fashion brand Belstaff and
Swiss leather goods maker Bally, the sources added.
"The idea is to have access to public markets, and the
proceeds would be ploughed into the Labelux group, not so much
in Jimmy Choo, which is well funded, but in the group's other
brands," a source close to JAB said.
Bally, which has been struggling to find its direction, last
year hired Frederic de Narp, a former Richemont group
veteran to craft its strategy, aided by creative director Pablo
Coppola who was previously with Tom Ford and Christian Dior.
JAB'S LUXURY BRANDS INTEREST
With Labelux mulling a flotation of its prized asset there
has been a suggestion by some fashion industry executives and
bankers that JAB's interest in its luxury business might be
waning, having not bought any brand since Belstaff in June 2011.
"There were a lot of luxury labels that went up for sale in
the past few years that did not require fortunes to buy them,
but they (Labelux) did not touch them," one London-based banker
specialising in luxury goods said.
Labelux was offered several potential targets such as
Italian tailor Brioni and jeweller Pomellato but let both brands
fall into the hands of Gucci's owner Kering, for
example, the banker said.
But the source close to JAB said Labelux would return to the
acquisition trail once it had sorted out internal issues such as
hiring a new CEO for Belstaff, deciding on Jimmy Choo's
flotation and making progress with Bally's turnaround.
"The group will be looking at buying more companies once it
has consolidated what it already has," the source said, adding
that it would decide by the summer on the IPO.
Since it was created in 2007 Labelux has lost many of the
original management and creative teams it took on.
At Belstaff Harry Slatkin, who made his name in scented
candles, left last year as chief executive but still retains a
small stake in the brand with long-time friend Tommy Hilfiger,
who had been brought in as a consultant.
Belstaff, a once-dormant outerwear company founded in 1924,
has invested vast sums in flagship stores and brand ambassadors
such as actor Ewan McGregor and footballer David Beckman but
still needs to fine-tune its strategy, fashion industry
executives and consultants say.
Meanwhile JAB has shown more interest in coffee than beauty
or luxury in the last two years, acquiring Caribou Coffee
Company for $340 million, Peet's Coffee & Tea for $1 billion and
D.E. Master Blenders 1753, owner of Douwe Egberts coffee, for
about 7.5 billion euros.
In 2012 Labelux sold two brands back to their original
owners, jeweller Solange and fashion brand Derek Lam.
"There are more opportunities for consolidation in luxury
and in coffee than there are in beauty," the source close to JAB
Labelux declined to comment for this story.
(Additional reporting by Martinne Geller and Anjuli Davies in
London; Editing by Greg Mahlich)