LONDON — With a new owner, Jimmy Choo is out to move beyond footwear and leather goods.
The company, acquired earlier this week by the private equity firm TowerBrook Capital Partners LP, will unveil a full eyewear line by the end of the year and plans to launch its first fragrance in 2008.
Choo also will introduce “runway collections” of shoes, starting with the fall season. The capsule collections will showcase the brand’s edgiest designs and will be sold alongside the core collections at Choo’s primary showrooms.
In an exclusive interview with WWD, Robert Bensoussan, chief executive of Jimmy Choo, outlined the brand’s projects for the coming year, as well as his own, parallel plans to build a portfolio of luxury brands with TowerBrook.
As reported, TowerBrook and Gala Capital, the Spanish private equity firm, purchased Choo in a deal valuing the London accessories company at 185 million pounds, or $364.5 million at current exchange.
TowerBrook bought Choo from Lion Capital, formerly Hicks Muse, and controls 80 percent of the company; the remaining 20 percent is in the hands of Choo’s founder and president, Tamara Mellon, as well as Bensoussan and management.
Bensoussan said he, Mellon and management had “heavily” reinvested their gains from the sale back into the company.
The sale was the second buy-out for Choo in a little over two years, a rarity in the world of private equity, where companies usually hang onto their investments for three to five years. Bensoussan said Lion Capital was raising a new fund and welcomed the exit. He added there was no shortage of offers over the past two years. TowerBrook was already a known entity; it had wanted to buy Choo back in 2004 but came in too late.
“We’re not going to talk any more about selling for a long time now,” said Bensoussan. “We’re going to continue developing this company independently. There is still potential for growth.”
Mellon said in a telephone interview that TowerBrook would take a longer-term view than most private equity companies and help Jimmy Choo work toward reaching its goal of 1 billion pounds, nearly $2 billion dollars, in valuation.
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Bensoussan admitted the firm’s biggest challenge right now was building the product lines successfully. “How do we integrate the new products into the mix and ensure they are successful? How do you do the sexy sunglasses, the sexy perfume, and ensure it fits into the Jimmy Choo world?”
He said the company was close to signing a deal with an eyewear manufacturer, and that the eyewear would be priced at the designer level. He added Choo was still in talks with large and small fragrance companies but declined to give any details.
Bensoussan said jeans, lingerie and swimwear lines also were in the pipeline and would be launched “when the time is right.”
Bensoussan, an industry veteran who has worked with Christian Lacroix, Gianfranco Ferré, Burberry and Joseph, said he was eager to mimic the clothing companies’ ways of showcasing their wares and start “runway” collections to be sold through the Choo showrooms twice each year.
“We thought it would be good to have more fashion-forward, crazy pieces and be more daring,” he said. The first runway collection will be launched next month with about 30 sku’s.
Growth would also come from Jimmy Choo’s core product lines, he said. Bags, which the company launched in 2003, now account for 30 percent of the business, and profits are growing fast, he said.
Sales in the 2007 fiscal year are expected to reach 85 million pounds, or $167.5 million, up from 67 million pounds, or $132 million, in 2006. That growth, Bensoussan said, would come in part from the new retail openings. Retail sales account for about 60 percent of the business, the rest from wholesale.
This year, the company plans to open about 16 new stores, in Chicago, New Delhi, Shanghai, Cannes, Istanbul and Fukuoka, Japan, among other cities. By the end of the year, the company will have 77 stores.
Jimmy Choo owns about half its retail outlets, most of them in the U.S., U.K. and Western Europe. It has joint ventures in Japan and franchises in its smaller markets. Bensoussan said Jimmy Choo’s fastest-growing markets were Asia and the Middle East, although there was still untapped potential in the U.S. and Europe.
The company is looking to expand its store and showroom spaces. The Jimmy Choo store on Madison Avenue in New York, which has retail space on the ground floor and a showroom upstairs, will close next month and re-open in June with both floors dedicated to retail.The company wants to expand its showroom and office space both in Manhattan and Milan.
Beyond Jimmy Choo, which he will continue to run, Bensoussan has another, separate project in the works: building a portfolio of luxury brands with TowerBrook.
He said the new venture would be a holding company that would invest in luxury goods companies in a wide variety of sectors. The companies would have minimum sales of $20 million to $30 million.
“We still haven’t defined the exact size of the companies we’ll be investing in or weather we’ll take on companies that are in distress or in good shape. There are still a lot of opportunities out there,” said Bensoussan, who declined to say how much money was earmarked for investment. “I want to go back to what I was supposed to be doing five years ago with Equinox.”
When Bensoussan first purchased a stake in Jimmy Choo in 2001, he did so through now-defunct Equinox Luxury Holdings Ltd. His plan with Equinox was to acquire majority stakes in family-owned, European luxury concerns.
That never happened, and he focused his energies on building up Jimmy Choo.
The new holding company will also be looking to acquire majority stakes in “interesting companies with potential,” said Bensoussan. “The idea is to find them, understand their potential and make them work like Jimmy Choo.”