Luxury shoemaker Jimmy Choo is going to have a new owner. It seems Michael Kors has bought the company, who has put shoes on Princess Diana at one point, for a whopping $1.2 billion.
Michael Kors will pay a premium of 36.5 percent to Jimmy Choo’s closing price before it was put up for sale.
Founded in the 1990s, Jimmy Choo made his brand a big name in the celebrity world. Three quarters of the company’s revenue comes from shoes and there are 150 company-operate retail stores across the globe.
Michael Kors has been struggling in recent years, losing 65% of its market value since 2014. Despite the announcement, shares of Michael Kors slipped on Tuesday during trading but managed to close modestly in the green. Meanwhile shares of Jimmy Choo rallied 17%.
According to Kors, the acquisition of Jimmy Choo will help the company expand its footwear portfolio to 17% of total sales from 11%.
CEO John Idol remarked that Jimmy Choo could potentially bring in $1 billion in sales annually with stores opening in Asia.
Disclaimer: We have no position in Michael Kors Holdings Ltd (NYSE: KORS) and have not been compensated for this article.